You don’t really know how you’re going to live in retirement until you start doing it. But that doesn’t mean you can’t plan ahead. There’s lots of advice, and many guidelines, to help you chart your way through retirement, some true and some false…
Here are three common assumptions, and the reasons why some of them are fact, some are fiction and some in between.
Myth: Your personal pension fund can run out of money.
True or False? True.
It’s a great thing people are living longer, but it does have a worrying consequence: it is more and more likely we will see people living long enough to run out of funds in their pension. This is a prime example of why proper, in-depth retirement planning is an absolute essential; the more you are able to build up, the longer your pension pot will last.
Myth: Social Security will pay the bills.
True or False? False.
These days, so many workers make the mistake of not saving for retirement and falling back on Social Security instead. But even in a best-case scenario (meaning, no eventual cuts), those benefits will only replace about 40% of the typical worker’s pre-retirement income. Most folks however, need about double that amount to pay the bills in retirement, and that assumes a fairly modest lifestyle. If your goal is to live it up, you’ll need a lot more.
Myth: The stock market will pump up your income.
True or False? Both.
With the recent volatility in the stock market, you might be wondering if it’s time to pull money out of the market to minimize risk. But retirees should stay the course as a means to grow their wealth. Stocks are one of the best ways to grow your money over time making them a great option for retirees looking to build up an estate to leave to their children. However, making uninformed and premature decisions could cost you dearly.
While there’s no asset allocation that’s right for everyone of a given age or in particular situation, there are steps you can take to limit downside stock market risk. Talking with a professional financial planner can take the guess work out your retirement income portfolio, while providing you with strategies for achieving effective tax reduction and inflation protection.
In today′s world, the importance of a well-executed retirement plan cannot be underestimated. Come experience the CKS difference; click here to set up a complimentary strategy session today.