How to Take Control of Your Retirement

We understand that the fear of the unknown, especially regarding retirement, is common among many individuals. In fact, more people fear retirement over death due to a lack of strategy and planning. That’s why it’s crucial to develop a comprehensive plan to mitigate these fears and uncertainties.​

Addressing Financial Concerns

87% of people fear not having the income they are used to in retirement, with healthcare costs being a major concern. Surprisingly, nearly 80% of people have no clue how much they should be saving for retirement. By focusing on controllable factors, such as establishing a disciplined savings plan and proactively managing healthcare expenses, you can alleviate some of these common anxieties.​

Considering Lifespan and Retirement Timing

Understanding lifespan statistics is vital in retirement planning. On average, men live to age 85 and women to age 87, with a joint life expectancy for couples being 89%. Factors like exercise, diet, stress management, sleep, relationships, and having a purpose can improve lifespan. We also discussed that while many aim to retire at 68 or older, the average retirement age is 61, influenced by various personal and financial factors.​Pure Financial Advisors+2Pure Financial Advisors+2Apple Podcasts+2

Optimizing Social Security Benefits

The timing of claiming Social Security benefits significantly impacts your monthly payments. Claiming benefits early results in reduced payments, while delaying increases them due to an 8% annual delayed retirement credit. For example, claiming at age 62 might yield $1,400 monthly, whereas waiting until 70 could increase the benefit to $2,480. It’s essential to plan strategically around Social Security to maximize your retirement income.​

Planning for Inflation and Healthcare Costs

Inflation can erode your purchasing power over time. For instance, milk prices increased by 73% from 1997 to 2022. Healthcare costs also tend to rise with age, with average monthly expenses increasing from $500 at age 65 to $1,500 at age 95. Incorporating these factors into your retirement forecasts is crucial to maintain financial stability.​

Strategies for Asset Allocation and Tax Efficiency

Effective retirement planning involves deciding how to allocate assets among stocks, bonds, and other investments (asset allocation) and determining the most tax-efficient accounts to hold these assets (asset location). Understanding taxation on distributions in retirement and exploring strategies like Roth conversions can lead to tax-free growth and income, enhancing your financial outcomes.​

Savings Benchmarks for Retirement Readiness

To ensure a comfortable retirement, aim for specific savings benchmarks: six times your annual salary by age 50 and ten times by age 67. These targets serve as guidelines to assess your progress and make necessary adjustments to your savings strategies.​

Seeking Expert Advice

If you have questions about managing retirement funds, such as borrowing from retirement accounts or selling stocks to manage tax consequences, it’s advisable to consult with financial advisors. They can provide tailored strategies to optimize your financial outcomes.​

Conclusion

By focusing on controllable factors like savings, investment strategies, and healthcare cost management, you can alleviate many common retirement fears. Proactive and informed decision-making is key to achieving a secure and fulfilling retirement.​

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.