The Top 5 Retirement Questions We’re Asked

When it comes to finances, the majority of questions we get are about retirement. Even if you love your job, after years of hard work, you are probably looking forward to the days when you get to kick back and relax a little more. So it makes sense that you would want to make sure your retirement plan is solidified!

Are you saving enough money to retire into the lifestyle you want? How should government changes to Social Security and taxes impact how you plan for retirement? Should you be worried about inflation?

We’ve taken five of these common questions, and are giving you our answers! Remember, everyone’s situation is unique. While these are some general answers to common questions, you can also schedule a free introductory consultation right here!

1. How much money do I need to retire? While this may be the biggest question on everyone’s mind, it actually isn’t the correct one. We are much more interested about income in retirement than we are about a specific bucket of money. (More on that in this recent podcast episode.)

   How much regular income you will need to retire depends on what age you want to retire at, what kind of lifestyle you want to have once you retire, and any potential health issues or other expenses you will need to be prepared to cover.

   With all these things in mind, we like to look at those factors to determine when you can retire, and what else may need to be considered in your plan.

2. Should I be worried about inflation in retirement? When planning for retirement you should absolutely take inflation into consideration. A simple definition of inflation is when prices increase in an economy over time. Once you retire, your income will no longer fluctuate to meet inflation because you aren’t getting pay raises from a job and likely will have a fixed income source.Your retirement plan needs to account for potential raises in inflation in order for you to have enough money to still cover your expenses.Check out our recent article, Inflation and Your Retirement, for a deeper dive into the potential impacts of inflation.

3. Can I count on Social Security? There are many different perspectives about Social Security, but we always recommend you have additional income sources in retirement. The latest changes show that we can anticipate seeing shortfalls in Social Security starting in 2033 for certain payouts if no further action is taken to correct the shortfall. Whether or not lawmakers make changes to Social Security, it is smart to have a more diverse retirement plan.For more information about the future of Social Security, check out our recent blog: Answering Your Questions About Social Security.

4. Will taxes go up? While most taxes are currently at a historic low at the time of writing this, it is very likely they will increase. Your retirement plan needs to include a plan to cover any increases in taxes. There are several things you can add to your long-term strategy to help account for a tax increase.

   One of the ways we often consider accounting for taxes in a retirement plan is to invest in pre-taxed investments like a Roth IRA. Utilizing a Roth option can often be valuable because the government is taking taxes out at the time you invest rather than when you start taking money out at retirement.

5. Should I have long-term care insurance? This will depend on your specific situation. Long-term care insurance covers costs should you need to stay in an assisted living facility, nursing home, or have at-home caretakers for longer than three months.

   The majority of retirees should likely have some form of long-term care in their later years. If you may not have the income to pay out of pocket for that care, you should check with your financial provider to find out if long-term care insurance is a good option for you.You should also strongly consider long-term care insurance if you have a significant health risk that may affect you prior to or after you reach retirement age.

We hope these answers to some common retirement questions have helped you as you are planning for your own retirement. Every situation is completely unique so if you still have questions or want some advice as you develop your retirement plan, please consider scheduling a complimentary one-on-one consultation with one of our financial advisors here at 210 Financial. We’d love to talk with you about your financial plan!

 

210 Financial is more than just numbers. The “210” in our name stands for a childhood home that represented safety, love, and family. That is what we want to provide for everyone that we care for. Welcome home. Welcome to 210.

All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified tax professional for guidance before making any purchasing decisions. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. Life insurance policies are contracts between your client and an insurance company. Life insurance guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Life insurance riders may be available for an additional annual premium; riders may not be available in all states. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 210 Financial is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and 210 Financial are not affiliated companies. 01288957 04/22

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