Outliving your money – Do you have a CLEAR Picture?

The current economic landscape has many Americans reconsidering whether retirement is a realistic goal. While feelings can ebb and flow with the winds of economic change, most Americans are more confident about their retirement prospects, except for one primary concern: outliving their savings.

BlackRock published a survey showing that 68% of Americans feel like they are on track for retirement, a sharp increase from the previous year’s 56%. Good market return years can have that effect. However, despite that, more than 60% of respondents said they are worried about burning through their nest egg before they die.

This is the third straight year that 50% or more of respondents expressed fear about running out of money in retirement.

This fear is also cross generational. About 69% of Gen Z (those born between 1997 and 2012) said they were worried about the longevity of their savings. That compares to 56% of millennials and 63% of Gen X. Simply put, Americans in general are worried about outliving their savings.

Most Americans believe that there’s a magic number of about $1.5 million needed to retire comfortably. What’s your number? Do you know how much you need to retire comfortably without fear of longevity risk?

Given the financial headwinds of higher interest rates, social security uncertainty and continued inflation, many wonder if they can sustain their lifestyle for possibly a prolonged period of years. While inflation has fallen somewhat in some areas, when compared with January 2021, prices are still up 20%. Many are not accounting for these changes and what this could mean to their long-term retirement prospects.

So, what is your belief about your retirement picture? Are you like many who believe you need a million dollars or more to retire and that you’d be forced back into the workforce at some point due to inadequate savings if you were to retire within the next 12 months. Perhaps you’re one that believes you’ll never save up enough money to retire. There are answers to these questions, you don’t have to guess at what your ability to retire looks like.

I’d like to provide you five points to focus on as illustrated by our CLEAR Process for CLEAR Direction in retirement. Our fiduciary financial planning process has helped many over the years in their pursuit of having retirement confidence and a clear direction toward their ability to retire and stay retired.

C – Coordinated Income Planning:

S – Sources of potential income identified. Pensions, Social Security, and investments.
A – Analyze & coordinate income sources with other planning areas.
F – Fine-tune investments, as needed, to reduce risks, potentially retain capital and generate dependable income streams.
E – Efficiently and tactically adjust income strategy as financial needs and conditions change.

L – Life/Medical/Long-Term Healthcare Hedging:

R – Review existing insurance coverages (or lack thereof) to ensure adequacy and relevance.
I – Investigate possible insurance hedge alternatives to mitigate risk to the estate or to enhance the estate (tax reduction, LTC alternatives, etc).
S – Scrutinize affordability impact to the longer-term plan needs.
K – Know and implement your insurance strategy, re-evaluate frequently as life changes.

E – Efficient Tax Strategy Analysis

T – Tag current personal tax exposures.
A – Ascertain your ability to reduce that exposure.
X – X-ray future tax liabilities for you and your heirs (IE – the hidden taxes).
E – Evaluate estate strategies (gifts, trusts, etc) and the ability to reduce inherited taxes to you, and your heirs.
S – Systematize the solution(s) (Roth conversions, strategic gifting, etc.).

A – Advanced Financial Planning (Estate Planning)

H – Holistically review current plan considering all planning areas.
E – Evaluate any problem areas
I – Initiate proactive solutions that coordinate with all planning areas.
R – Re-evaluate frequently considering changes to legal and tax code.

R – REAL Investment Risk Management (with Sherman Portfolio’s)

R – Risk score analysis – Get to know your personal risk score
E – Evaluate, research and re-allocate regularly
A – Advance and protect tactically
L – Limit Unnecessary Risk Exposure

I hope this is helpful to your retirement journey. Call us, come see us or visit us at www.woottonfinancial.com, we’d love the opportunity to help address your questions and concerns and provide you Clear Direction for Your Retirement®.

Investment Advisory services offered through Game Plan Advisors, Inc., a registered investment advisor. Insurance services offered through Wootton Financial Group, Inc. Game Plan Advisors, Inc. and Wootton Financial Group, Inc. are affiliated through common ownership. Neither Game Plan Advisors, Inc nor Wootton Financial Group, Inc. offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.