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​If you’re behind on your retirement planning, you’re not alone. A recent study from Gallup found that more than half of Americans worry that they won’t have enough money in retirement.1 Think you can overcome your savings gap by working into your late 60s or even your 70s? You’re not alone in that strategy either.
 
According to a Bankrate study, 70 percent of workers want to continue working as long as possible. More than 40 percent of those respondents said they’ll have to keep working because they will need the money.2
 
Working late into life may seem like a reasonable and prudent idea. After all, if you’re working, you’ll have regular income and can continue contributing to your retirement accounts. You also eliminate years of retirement spending that may drain your savings.
 
Unfortunately, a strategy to work late into retirement age may not be as reliable as you might think. Below are a few reasons why you may want to rethink your plans to work into your 60s or even 70s. While working longer may be a good idea, it may also be wise to have a backup strategy.

Disability
 
The Council for Disability Awareness estimates that the average adult has a 25 percent likelihood of becoming disabled.3 However, the risk may rise with age. The Centers for Disease Control and Prevention says 60 percent of all adults age 65 and older suffer some kind of limitation on at least one basic living activity.4
 
Disability can always have a substantial financial impact, but it can be even more devastating for older workers. If you’re unable to work, you’ll lose out on income and retirement contributions. You’ll also need to take money from your savings to fund your lifestyle and pay for your care.

Long-Term Care
 
According to the U.S. Department of Health and Human Services, 70 percent of all 65-year-olds will need long-term care at some point in their lives.5 Obviously, if your health has deteriorated to the point that you need long-term care, you won’t be able to work.
 
However, another possibility is that your spouse may need care. If he or she needed full-time support, would you be able to hire in-home help? Or would you have to quit working to provide the care and assistance? And how would that impact your finances? Again, your desire to work may be in conflict with conditions beyond your control.

Job Loss
 
A recent Transamerica study found that 30 percent of retirees stopped working earlier than they would have liked. A majority—two-thirds—quit because of employment reasons, primarily job loss.6
 
Employment conditions can change quickly. Just because your job is secure today doesn’t mean it will be in the future. Working late into life may be the right decision, but be sure to have backup strategies in the event your job is eliminated.
 
Ready to explore alternatives and backup plans? Let’s discuss it. Contact us today at Senior Care Alliance to start the conversation. We welcome the chance to help you analyze your needs and develop a strategy.
 

1. https://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx
2. http://www.bankrate.com/finance/consumer-index/money-pulse-0916.aspx
3. http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp
4. http://www.cdc.gov/nchs/fastats/disability.htm
5. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
6. https://www.transamericacenter.org/docs/default-source/retirees-survey/retirees_survey_2015_report.pdf

 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18087 – 2018/10/1

​https://www.kiplinger.com/article/retirement/T007-C032-S014-3-spending-strategies-for-your-retirement.html

If you’re worried about having enough money to fund your retirement, you’re not alone. According to the 2018 version of Gallup’s annual survey about Americans’ biggest financial worries, retirement topped the list for the 16th year in a row. Nearly two-thirds of respondents said they were concerned about not having enough money for retirement.

Of course, having enough money is only half of the equation. Even if you save a significant amount for retirement, you still have to manage your spending throughout retirement to make sure your funds last. Excessive spending can quickly deplete even the most substantial nest egg.
That’s why it’s so important for retirees to have a written spending plan. A spending plan serves as a budget and also as a guide for distributions from your retirement accounts. You can check your spending against the plan at any time to see if you are on track or if you have veered off course.
It’s no easy task, though, to develop such a spending plan. You can’t predict the future. You may not know what your spending needs will be as you get older. How do you develop a spending strategy when so many of the variables are unknown?

There are a few different approaches you can take to planning your retirement spending. Below are three strategies commonly used. Base your spending plan on your unique needs and objectives. The important thing is to have a plan that works for you and to follow that plan so you can protect your retirement assets.

Level Spending

Perhaps the simplest approach is to assume a level spending amount throughout your retirement. You might base this amount off your current spending, or you could base it off a percentage of your pre-retirement income. The advantage of assuming a flat spending amount throughout retirement is that it makes it fairly easy to determine whether you’ve accumulated enough assets.

However, there are some issues with assuming a flat spending amount. One is that a flat spending plan may not account for unpredictable expenses that could pop up in retirement, such as home repairs, medical costs or even the occasional vacation. A flat spending plan also doesn’t account for inflation, which could have a sizable impact on your expenses over the long term. Although a flat spending plan may be simple, it may not be the most accurate approach.

Increased Spending

A second approach is to assume your spending needs will increase gradually from year to year throughout your retirement. For example, you might factor your expenses to increase at the same rate as inflation. Or you could build in greater increases in spending in your later years to account for long-term care needs and health care costs.

A plan that incorporates increasing expenses can be helpful, because it accounts for inflation and the possibility that you’ll have increased health care needs as you advance in age. However, you may want to enjoy the early years of retirement, when you are healthy enough to travel and pursue hobbies and other activities. If so, you may not like the idea of reducing your spending in the early years so you can spend more in your later years.

Dynamic Spending

One intriguing approach is to vary your spending from month to month or year to year. For example, if you plan on traveling in the warmer months of the year, you might assume your spending will increase in those months. During the fall and winter, though, you may opt to live on a much tighter budget.

A dynamic spending plan could have behavioral benefits. If you give yourself certain months or periods of time in which you’re allowed to spend more money on fun activities, you might have less incentive to go over budget during other times.

Of course, the tricky part of a dynamic spending plan is that you have to stick to the budget. If you don’t stay under budget during the lean months, you won’t be able to afford the periods of time when you are scheduled to spend more money on vacations or other fun activities. If you don’t have that kind of financial discipline, a dynamic spending plan may not be the best option for you.

The Bottom Line

Your spending plan and budget can make or break your retirement lifestyle. Spend too much early on, you may not have enough to cover inflation or rising health care expenses. At the same time, you want to enjoy the lifestyle you and your spouse envision for your golden years.
Discuss with your spouse the goals you have for retirement and write them down. Then, discuss the timeframe in which you want to achieve them. Cruise at the beginning of your retirement? Month-long European vacation when you’re 75? By planning your budget around the big expenses now, you will have room to plan for any surprises in retirement.

​Estate planning is a critical part of any financial strategy, but unfortunately it’s something that many people skip. An estate plan helps you distribute your assets to loved ones after you pass away. It also helps you protect your family and leave a legacy.
 
Contrary to popular believe, an estate plan isn’t just for people who have accumulated vast wealth. Even those with a modest estate should think about what will happen with their assets after their death. Before you develop your plan, though, you should think about what kind of goals you want to accomplish. Below are a few objectives you may want to incorporate into your legacy plan:

Providing protection for your loved ones.
 
Perhaps the most important objective any person can have with estate planning is providing support and protection for loved ones. That’s especially true if your spouse and children rely on you for financial support.
 
You’ll likely want to start by deciding who should receive assets. If you have a spouse, you may want to leave the bulk of your estate to him or her. You also may want to leave assets for children, grandchildren, extended family or even a favorite charity.
 
After you decide who gets what, you’ll then want to consider how best to distribute the funds. For example, you may want to use a trust so you can minimize the impact of probate and exercise more control over the distribution of your assets. You might also consider increasing your life insurance coverage to maximize how much you can leave behind.
 
One of the best ways to figure out what to leave to whom, and how to leave it to them, is to create a vision. Write down what you would like to see happen with your assets after you pass away, and then create a plan to make sure your vision becomes a reality.

Managing estate costs and risks.
 
If you’re not careful in your planning, you might jeopardize your estate. Even if you’re not wealthy enough to face estate taxes, there are still threats that could drain your assets. One of those is probate. This process can tie up asset distribution. On top of that, it can also come with large administrative and legal fees.
 
Another potential risk to your legacy is medical debt. End-of-life medical treatment and long-term care can be expensive. And if you haven’t prepared for these costs, then your family may be forced to pay for them from your estate. Supplemental insurance can cover the costs not paid by Medicare, and long-term care insurance can also be a valuable tool to protect against this risk.

Planning for incapacitation.
 
While it’s not pleasant to think about, there is a chance you’ll become incapacitated before you die. Usually a result of conditions like strokes or diseases such as Parkinson’s or Alzheimer’s, becoming incapacitated means that in the final days, weeks or even months before your death, you’ll be unable to communicate your medical and financial wishes to your family.
 
If you haven’t planned for this, your family may make decisions for you that you wouldn’t have otherwise made. But with tools such as a living trust, a power of attorney or a living will, you can minimize the financial impact of incapacitation. These are all fairly straightforward documents, and a financial professional can help you decide which ones are best for you.
 
Ready to develop your legacy plan? Let’s talk about it. Contact us at Senior Care Alliance for more information. We welcome the chance to help you analyze any remaining questions and develop a strategy. Let’s start the conversation today.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18086 – 2018/10/1