Uncomplicated- The New Retirement Lifestyle
The two generations of Baby Boomers who had to have it all and do it all are now looking for a less complicated lifestyle in retirement. By no means does that mean less fulfilling.
We have high expectations. Things that used to be “nice to have” are now being called essentials. Vacations, pet care, smart phones, professional nail and hair coloring, dining out and green fees are now considered by many to be necessities. When you factor in longer life expectancies and the lack of old fashioned pensions, there is mounting pressure and concern about maintaining a desired lifestyle in retirement.
Let’s uncomplicate it.
First, map out basic expenses. What are the things you absolutely cannot live without? Pay for things you need with sources of guaranteed income like Social Security, pensions (if you have them), and guaranteed income annuities. Don’t gamble with your “paycheck”. These sources of income, if structured properly, will not run out on you. Will they be enough in later years? Probably not, but at least these checks will keep coming, no matter what.
Once you have solved your monthly income deficit, it is important to also recognize that proper investment allocation will help to fill in the gaps created by inflation, higher taxes, health care costs and your own longevity. These assets should be given time to grow and handle the ebb and flow of normal market fluctuations. These are not the funds you should count on for short term cash flow needs. Stocks have been known to outpace inflation better that most other vehicles over time.
So what if you haven’t saved enough to live the lifestyle you have grown accustomed to?
First, have your advisor do an income and expense analysis to see where you stand. If your money is not enough to maintain your desired lifestyle, you have a few options.
- Work a few more years, or plan to work in some capacity in retirement. It may be as simple as needing an extra $500 per month for the non-essential necessities (a real oxymoron!)
- Re-evaluate what you deem necessities. Compromise. Maybe you can cut back a little without feeling like you are giving in to mediocrity.
- Consider downsizing or possibly relocating. Housing expenses are a huge part of monthly cash flow.
- Take really good care of your health. Healthy mind and body=lower health care costs.
- Be Warren Buffet! Take note from a legend regarding your investments. Rule #1 Never lose money. Rule #2: Never forget rule #1….
- Get your head around the fact that you are no longer in an accumulation stage, but a distribution and preservation stage with life savings. Manage volatility instead of chasing returns.
- Work with a professional fiduciary advisor who understands and respects your values and let them do their job. You now have better things to do!
There you have it. Deconstructed and uncomplicated.
Questions? Give us a call or send us an email!
(732) 364 5462 Kathy@fffgonline.com
Kathy Nolan is the President and Owner of Family Focus Financial Group and has been in the financial industry for 40 years. Today, Kathy maintains her insurance practice and the fiduciary standard of Investment Advisor Representative, a series 65 licensed registration, with Global Financial Private Capital, an SEC Registered Investment Advisory Firm.
*Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor. Global Financial Private Capital and Family Focus Financial Group are not affiliated companies. Not intended for specific legal or tax advice. Any views expressed are for information purposes only and should not be construed in any way as an offer, an endorsement, or an inducement to invest or purchase insurance products.