by Dave Kutcher
We know last week we spent some time talking about some simple rules to govern or guide your financial plans to assure yourself that you are set up for retirement. Some things, however, are worth repeating and without doing so, we find people tend to keep veering off track.
This is a big year for retirees in the United States. More workers will turn 65 in 2024 than at any point prior in our history and we will be seeing over 12,000 people per day reaching what has been known as normal retirement age, age 65.
As we have intimated previously, your financial phases in life tend to be broken down into three major phases; accumulation, distribution, legacy. How you approach your financial goals and objectives and the tools and resources you use to get where you are trying to go are not the same when comparing the three phases noted above … however, it is best to understand the phases ahead of time and be planning for any shifts in resources, tools, plans etc. that might be employed differently in order to achieve the best results for you … some plans will require that you plan ahead or it will be too late to incorporate certain strategies to improve your lot during the distribution phase of your financial life.
The big thing to remember as one moves from accumulation to distribution, in looking at what tools and resources are available to help you meet your goals and objectives is that at this point, we worry less about how much you have accumulated and focus far more on what we can do with that accumulated value in a way that will serve you the best in terms of safety, growth and control and we employ tools that provide income far greater and predictable than strategies that simply shift your asset allocation to a greater mix of income producing assets and less on growth driven assets in the equity markets.
The biggest threat we hear about among folks turning age 65, and to some degree, rightfully so, is the concern for whether they are as prepared as they thought they would be … they’ve arrived but they are not sure they can make it work.
There are strategies and products around today that people remain unaware of in terms of how they can positively impact the years ahead during distribution of your retirement funds.
People approaching and arriving at retirement age are much more fearful of what lies ahead than most that we talk to who have already been on their journey. Interestingly enough, when we look at expectations and other thoughts driving people who have already begun their journey and those nearing that age of retirement is that while concerns of the pre-retiree in general are warranted, their ideas about investment risk, living expenses and the rising cost of health care are not receiving the attention these things deserve at this stage of life.
Just as an example, those planning ahead, on average, are assuming far less being spent on daily living costs than the current retirees are experiencing in real life. This type of miscalculation can be the difference between you outliving your money or your money outliving you. The latter is the only way to go, by the way.
Add uncertainty about things we can’t control such as social security/medicare benefits, inflation, taxes and long-term chronic illness care and one can begin to see the need to arrive well prepared and be aware of what is available to help you on your journey … it is paramount to success.
There are lots of ways to adjust and consider alternative strategies in order to make up for shortfalls and gaps in your planning. Don’t put your head in the sand. Meet with folks like us and get some information and some help on how you can best manage your years ahead.
Some simple reminders for you all;
Work with someone who knows the ropes and make a plan that you can stick to, but one that you can adjust and adapt as your life changes leading up to that magic day when you finally start to enjoy the fruits of your labor.
Start saving as early as you can. The compounding of your returns is no joke … this is the easiest way to save for the future. Playing “catch-up” is no fun.
Maximize plans that are available to you and take advantage of any “gimme’s” such as matching contributions by your employer. This is free money, don’t leave it behind.
Live within your means! Make a realistic budget and keep with it. It will serve you well in both the short and long term.
My name is David A. Kutcher, a retired Marine Corp Captain. My business partner in the lower 48 is Richard C. Scott, CLU, LUTCF. For nearly 40 years we have been helping folks with their personal retirement decisions. We encourage you to make an appointment and get ahead of your concerns as early as is possible. You can catch us on the radio every Saturday morning, “Retirement in the Last Frontier”, 8:30-9:30 on AM 650, Keni Radio and on Tuesday mornings, KFQD News Talk Radio AM 750 and FM 103.7. Frontier Retirement, 10928 Eagle River Road; Eagle River, AK 99577, (907) 795-7452.
