Making your clients retirement income stretch is more important for today’s health-conscious generations.The life expectancy of the baby boomer generation has it changed, and taking that into consideration is crucial. According to an article by Kiplinger.com, now that people live longer than their ancestors, the main concern is to avoid outliving retirement savings. A study by the Employees Benefit Research Institute showed only 18 percent of workers in the U.S. feel very confident about their retirement nest egg. For financial security, look at your current income. Then, try to duplicate at least 80 percent of what you currently earn or receive.
Modifying of the old rules
Financial and tax advisors used to advise people to make sure they had enough money to take out 4 percent from their retirement portfolios so the money wouldn’t disappear too soon. But that was when people did not live as long. The Society of Actuaries say there is a 45 percent chance one partner will make it past their 90th birthday. Instead of the “4 percent rule,” a safe portfolio withdrawal rate is about 2.8 percent.
Working longer for the benefits
So many baby boomers love to work. They have great careers as well as hobbies with strong earning potential. Working longer could also help baby boomers keep a zest for life, increasing longevity even more. From a financial perspective, staying with a career allows your investments to grow. Also, delaying Social Security and pension benefits often means a gain in payout when you do claim benefits. People who work full-time often keep their stellar health care coverage. A report by CNBC.com shows the U.S. average life expectancy levels may increase to about age 79 for men and 83 for women by 2030. At this time, the average American woman lives to age 81, while the average man lives to 76. Forecasts for Americans are similar to those for Croatia and Mexico. While people are living longer, experts point out Americans would live longer with better health care.
Having enough money put aside for retirement is not just about ski trips and golf outings, but about having a financial cushion to cover medical expenses and health needs.At CSI FInancial Group, we provide premier financial products and quality client support that Financial Advisors can rely on. For more information about us, please contact us today.