Decades ago, back in the industrial age when timecards were punched, and lunch buckets lined the ‘break room,’ a steady paycheck was the norm. Moreover, such stability was the backbone of the American Dream: buying a home, saving for retirement and maybe a goodly amount set aside to help send the kids to college.
The Golden Years…
Back then, it was common to work for a single employer until retirement rolled around. Then, ‘retirement’ was something that was celebrated and workers entered those Golden Years a bit ‘weary’ from years of hard work.
Of course, as the economy shifted further away from the ‘smoke-stack industries’ of that period to the beginning of the Information Age, companies required new skill sets. That meant workers needed more education to help them reach higher and higher standards of living—and better health!
Ultimately, living longer today means more time to enjoy not only family and friends, but the fruits of those years of working, whether it’s a motorhome, cabin in the woods or the ability to travel.
The economic impacts of living longer…
Retirees reaching the age of 65 may have a wake-up call about living two-or-more decades, for example, if their portfolio has not recovered from the 2008 economic bust.
In such cases, the 65-year old retiree does have a decent chance of making it through any market downturns just based on the stock market’s historical returns:
“The worst 20-calendar-year stretch was the two decades through 1948—and it still resulted in a 3.1% annual gain, according to Chicago investment researcher, Morningstar.” Jonathan Clements, Wall Street Journal April 25-26, 2015.
Indeed, the worry for most investors saving for retirement is the idea of running out of money, due to poor planning, unforeseen health costs and lack of portfolio guidance throughout their working years.
According to an overview by financial columnist, Brett Arends of the Wall Street Journal, such ‘fears’ about investing for retirement can be tempered by following a few investing steps:
“Turn it off!”
The financial networks are filled with investment gurus offering advice and making tea-leaf-like readings of every market movement.
Just remember, notes Arends, that most of these ‘experts’ were also caught off guard by the financial tsunami back in 2008.
Stay away from ‘trendy’ stocks…
It’s too easy, particularly for the investor who is going it alone without the help of a financial advisor, to get caught up in stock picking. Furthermore, relying simply on one’s own network of “experts” can lead to throwing money at what might well be considered “fashionable investments.”
Don’t forget Social Security’s ‘surprise’ benefit…
It might be considered one of great surprises for many workers who are starting to delve into their Social Security benefits: for every year they delay receiving benefits the amount, most likely, will increase by 8% a year.
Don’t count on Medicare for all health care expenses…
No surprise but health care costs are the biggest hurdle we all must face, and Medicare is not there to cover it all. It does pay for hospitalizations, doctor visits and prescription drugs.
A study by the Kaiser Family Foundation last year reported that the average Medicare beneficiary paid $4,374 in 2010—including out-of-pocket and premiums.
The solution for many investors…
Simply put, investors need to save more, and as investment writer, Ed Slot, points out in his book, “Fund Your Future…,”
“Wherever you are, it’s not too late to save. You won’t have anything if you don’t put something away.”
If you want to begin that all-important discussion about your financial future, call us to schedule a chat. Tell us about your retirement goals, and the lifestyle you hope to achieve at retirement. Let us help your develop a strategy to meet those goals.