Will Your Nest Egg Last for the Rest of Your Life?

Filed under: Retirement

Retirement Nest EggWhen we think of retirement savings, it’s common to attach ourselves to one particular number. We might decide, “This is the amount of money I need to retire, and I’m going to quit working when I reach that savings goal”. You’re certainly off to a great start, since establishing a goal is the first step to any major life change. But in the case of retirement, it can help to ask yourself “How many years will I need this money?” rather than simply asking how much money you need.

Due to better nutrition and health care, we’re living longer lives than ever. So the last thing you want to do is retire too early, and run out of money toward the end of your life. It’s important to consider the effects of the following factors upon your retirement savings.

Inflation. You may have calculated your retirement budget, and arrived at a savings goal, based on the cost of living today. But keep in mind that in the future, your food, housing, health care, and other goods and services may be higher. Your retirement plan should account for an increased cost of living.

Market volatility. If you’re counting on a certain level of performance from your retirement account, keep in mind that the stock market can be volatile and unpredictable. The old saying, “hope for the best, and prepare for the worst” certainly applies to your investment portfolio. Be sure to consider the fact that your retirement account may not perform as well as you had hoped, and have a back-up plan.

Unexpected expenses. No one envisions long-term nursing care as part of their ideal retirement scenario, but it can be a reality for many senior citizens. Be sure that you can cover the considerable cost of nursing care or other unexpected expenses in retirement, by purchasing additional insurance or including these possible expenses in your savings goal.

Sticking to the budget. You may find it difficult to stick to your expected retirement budget once you stop working. One good trick is to begin living on that budget before you stop working, and make the necessary lifestyle adjustments. This will either help you transition into a more frugal way of living, or cause you to realize you aren’t ready to retire yet. It’s certainly better to work another year or two, and save a bit more money for retirement, than to quit working before you’re really ready.

If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: www.NAMCOA.com .