Is the Thought of Retirement Haunting You?

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Haunted by the thought of retirement? Don’t stay in the dark or retirement will sneak up on you like a Halloween goblin!

We become accustomed to receiving a regular paycheck in our working years, but soon after the retirement party, you will realize that no work = no paycheck and your income must come from new sources because you still have expenses. We are forced to shift from earned income to collecting investment income. With careful planning of withdrawals, budgeting and careful spending you won’t fear the end of your career.

Healthcare costs in retirement will make you shiver! When you have a finite amount of money, medical care and prescription drugs can be dreadful. And the costs can multiply quickly if you require long-term care. A qualified advisor can clear the cobwebs and help you understand your options with employer medical coverage for retirees and private health insurance as well as Medicare, supplemental policies, long-term care insurance and Social Security claiming strategies.

Retirement requires the transition from accumulating value in our retirement accounts and investment portfolios to creating a sustainable income stream from what you have been able to save and invest over the years. You should keep your withdrawals as low as possible to diminish the horrifying possibility of outliving your money. Most advisors recommend withdrawal amounts around 4 percent annually, but each individual situation is different.

Everything gets more expensive all the time. The cost of goods and services will have increased measurably by the time you have been retired just ten years. You’ll still need to have some equities in your portfolio to combat inflation. Balancing growth, asset preservation and income creation strategies in retirement is an unnerving process. A good financial planner can make the shift to income a real treat with proper investment selection, forecasting, and withdrawal strategies, so don’t be tricked by bad choices as you near retirement.

Most of all, have a vision for your retired years. Plan to do things that will make you happy and fulfilled.  Retiring with no thought to hobbies or interests can be quite scary, so start thinking of life after work before you retire.  An active mind and body will serve you well in retirement.

Retirement does not need to be a horror.  It can be the best time of your life if you plan for it.

 

Mike St. John, CPA, CRPS®, is a Vice President & Retirement Plan Services Manager with Alpine Trust & Investment Group.

 

 

 

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

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