Joe & Mary’s Story
Married for 25 years, Mary 48 and Joe 51 have worked hard for most of their adult lives. Now, their two kids are out of the house, and they are looking forward to finishing up the next few years of work and heading into their retirement years. They are comfortable and have put money aside in their company retirement plans. Joe has about $150,000 in his retirement account, and Mary has a little more than $50,000 in hers.
With the children gone, and more than a decade to add to this nest egg, Mary still wonders if they will have enough to continue to live their comfortable lifestyle after retirement. While doing some reading, she became even more alarmed. She began to ask herself, “What are the chances that we will outlive our retirement income? Does Medicare cover the cost of Long Term Care [LTC]? What unexpected expenses might derail our entire financial security?”
Mary is seeing her concerns in real time as she currently deals with her aging parents. Right now, they are doing reasonably well, but they have faced several unanticipated expenses. The uncertainty of other unknowns as they age is something Mary’s afraid to face.
In fact, the uncertainty about her parents has caused more questions: How similar is Medicare to our current medical insurance? What does it cover and what will my out of pocket costs be? What will my actual Social Security benefits be when Joe and I retire? What will happen if one of us dies before we retire – how will this affect the survivor?
Even though Mary and Joe are more than a decade away from retirement, they are right to ask these questions about retirement planning now. What they don’t know can hurt them. What choices can Mary and Joe make NOW to make sure Mary’s concerns about living longer than their retirement funds don’t come true?
Here Are Some Things You Don’t Know
What You Don’t Know: You May Outlive Your Income
Retirement is about INCOME, not assets.
What do we mean?
Your assets are the INCOME generator. When the value of your assets changes, that affects your INCOME. You live and play from your INCOME. It’s a mistake to think that when you retire, the value of your income generator – your assets – is guaranteed to stay the same throughout your remaining lifetime.
Before you decide to retire, consider this:
- The choices you make about your Social Security benefits and Medicare insurance benefits can adversely impact your retirement savings, and they are permanent and irreversible.
What You Don’t Know: The Dangers of Retirement
A 2008 British research study showed that the highest number of injuries and deaths of those climbing Mount Everest occurred on the descent – coming down the mountain – rather than during their ascent up. How is this fact relevant to your retirement? Because, as the story of Joe and Mary illustrates, your descent into retirement is a lot like coming down safely from the top of Mount Everest.
To get to retirement, you do a lot of planning in advance, you get all your gear ready, you find a few guides who can help you, and then you begin the climb up.
You’re excited and prepared – you see the summit and bolt for it. In retirement planning – that equates to 30 or 40 years of managing your money smartly. But, once you reach the highest peak – retirement age – how do you get down successfully?
Like the descent from Mount Everest, unpacking your retirement funds requires more critical planning in advance, and a great deal of patience in the making smart choices at the right time along the path down.
We can help you make your way safely down this mountain called retirement. Your strategy and plan for distribution are potentially even more critical than your earning and saving years. A poor decision here may cost you dearly.
What I Didn’t Know: My Own Mount Everest
Want To Get In The Know?
Solutions: Planning For Longevity Risk
Do you think starting at age 50 is too early to begin planning for your golden retirement years? If so, think again.
Most people start thinking about this when they are 64 – that’s too late. By staring early, you give yourself plenty of room to make smart choices and avoid “longevity risk.”
Avoiding the risk of outliving ones’ assets or INCOME generator is paramount in making the descent down the mountain into retirement. Outliving the funds produced by your income source results in a lower standard of living, reduced care, a return to employment or other circumstances that may negatively impact the golden years of you and your loved ones.
Solutions: Planning Checklist to Manage Longevity Risk
- It may be better to delay taking your Social Security Benefits. You can check on your Social Security Estimated Primary Insurance Amount at https://www.ssa.gov/myaccount/.
- Get an analysis of your Social Security benefits and learn how they might impact your retirement savings.
- Get tax neutral to make smarter retirement decisions based on economic merit and not strictly for tax reasons.
- Understand what your Longevity Risk is and how you can avoid or eliminate falling into the financial pitfalls that plague retirees who fail to look at how each part of their retirement planning impacts the big financial picture.
- Identify how tax-qualified retirement savings (401k, IRA, 403B, SEP, etc.) might create a massive Medicare cost in the future.
- If a pension is part of your assets, understand the Pension Protection Act.
- Identify what assets to liquidate first, and which ones will serve you better as your retirement progresses.
Just like you needed a guide to get up the mountain, the descent is critical – you need a guide, even more, to help you make it through your retirement descent. You want to be in control of how to make your retirement funds last.
Just as planning to climb Mount Everest is a complex and multi-layered process, so too is planning how to reduce the risk inherent in outliving your retirement income. You need a guide who will do the analysis you need, ask the tough questions, and show you options to help you make informed decisions.
How We Can Help
There are many options and solutions to these concerns. Everyone’s situation is unique, and the best way to determine what’s appropriate for your circumstances is to schedule a FREE Social Security Income Longevity Assessment Now! Call, Email or Schedule An Appointment Now!
About Julie Ann Hepburn
“There has to be a better way,” says Julie Ann Hepburn, founder of National Private Client Group LLC, a financial advisory firm headquartered in Chicago, which promotes sound wealth building principles that leave behind the broken system of traditional financial planning. In her work with clients nationwide, Julie Ann’s approach uses a combination of historically sound financial solutions, which focuses on safeguarding principal and increasing the efficient use of investment dollars to build sustainable wealth and income longevity.
Income longevity is her mantra.
“The longer we live, the better chance there is that we will outlive our money,” says Julie Ann. Her advisory practice uses a three-prong approach to building long-term wealth:
- A savings/financing vehicle with financial legacy benefits;
- Unconventional investment solutions that produce consistent returns with less risk than “playing the stock market”; and
- A long-term care plan to ensure that your money outlives you and provides a financial legacy for those you leave behind