3 Retirement Facts You Should Know
Your retirement isn’t something that can be plotted on a straight line. You need to position yourself to withstand the unexpected, while also preparing yourself for what’s most likely to happen.
- The money you save
- Your investment risk tolerance
- Your healthcare costs
- Unexpected financial emergencies
- Controlling your debt-to-income ratio
- Maximizing your retirement income sources
- Carefully honing your retirement lifestyle
The precise way you prepare, transition, and embrace the retirement process will be unlike that of anyone else. (The fact that everyone’s story is unique is a big part of why we love what we do at Hanson McClain.)
With that mind, here are 3 retirement facts you should know.
1) Health Permitting, You Might Keep Working
Recent Gallup Poll1 findings indicate that nearly ¾ of Americans retiring in 2017 plan to work either part-time (63%) or full time (11%).
Unless you’re among the 26% of Americans who stop working altogether, chances are you’ll continue to work in some capacity beyond the age of 65.
Pros: The good news is, many retirees keep working out of desire, and not necessity. Why?
- To stay active
- To bring in extra spending money
- To stay connected to community
The better news: All these things contribute to your mental, physical, and financial health.
Cons: The downside is that you may be among those who need to work to make ends meet.
- You may have health concerns (for you, or your spouse if you are a caregiver)
- You may face difficulties keeping a job that meets your ongoing financial needs
2) This Isn’t Your Grandparents’ Retirement
We are living longer and retiring later. The chances are very good that you can count on at least 20 years of retirement.2
Unlike our grandparents, for whom average US life expectancy was less than 70 years, Americans of all races and sexes who were 65 in 2015 can expect to live an average of an additional 19.4 years.3
Pros: The good news is that life expectancy is on the rise.4 Much of this is thanks to improvements in:
- Medical care
- Motor vehicle safety
- Healthy food
- Standards of living4
Cons: Living longer means more expenses.
Today’s retirees need to plan carefully to find new ways to fund longer retirements.
3) You Will Change Your Strategy
At some point during retirement, you’ll need to rework your plan. As of 2016, the median price tag for retirement amounted to more than double the cost of an average house—upwards of $740,000.5
Whether you’re retired, or still a few years away, keep in mind, small changes now can have a big impact later:
- Review your flexible spending. What expenses can you modify?
- Look for better substitutions. Is there an expense or activity that you can trade off for a more economical one?
- Step back and look at the big picture. What major shift can you consider, such as downsizing, that will lower your cost of living?
Pros: Planning for change is the best way to ensure that your strategy remains sound.
Just as we form good habits of exercise, visits to the doctor, and vehicle tune-ups, regularly reviewing our retirement plan is simply smart for longevity.
Cons: Less than 33% of Americans say they are financially prepared to face a retirement that extends beyond ten years. 5 Financial insecurity can take its toll on your mental and physical well being. But without a credentialed financial support team in place, the ability to quickly change directions can be difficult.
As we face an ever-changing retirement landscape, it’s important to prepare for unexpected twists and turns. With careful planning and regular reviewing, we can smooth the way for a longer, better retirement.
If you don’t have a plan in place today, it may be time for you to act.