Ways to Avoid Outliving My Savings

May 30, 2022

Preparing for Retirement

According to a recent poll, roughly half of couples disagree on how much money they should have saved by retirement.

New evidence suggests, however, that couples who work together on financial planning are happier and more successful in retirement. Couples who score high on cognitive interdependence (meaning they think of themselves as a pair rather than as individuals) are more likely to engage their spouses in retirement planning. Better still, if they agree on their retirement financial objectives, they tend to feel better about themselves and approach retirement with more confidence – together. ²

Outliving Our Savings

According to the Aegon Center for Longevity’s 2019 poll, over half of Americans are concerned about running out of money in retirement. People in their 60s and early 70s who retire may believe they have enough assets to survive 20 years. But what if they live a another 25 or 30 years? The last thing you want to worry about as you get older is running out of money, especially if you’ve started accruing long-term caregiving expenses. Segmenting your retirement into stages and matching each stage with a different income source is one method to better prepare for a longer-than-expected retirement.

Keep in mind that if you have a flexible estate plan, you may support the latter phases with money set aside for your heirs. They may miss out on a financial bonanza if you die, but it’s better than having to pay for your expenditures with their own money.

Laddered bond portfolios, phased systematic withdrawal programs, and annuities are some of the options for combining income sources with retirement parts. Please contact us if you’d like to talk about which techniques might be ideal for your situation.

Making Enough Money

Many Americans may not be earning enough to save enough for retirement. According to a recent report, 70% of Americans live paycheck to paycheck. Not only does this leave little money for savings, but 63 percent of people say they aren’t earning enough to live the lifestyle they desire now. ⁴

Mental Well-Being

It should also come as no surprise that more than eight out of ten Americans of all ages think that financial security is essential to their mental and emotional health.

Illness and Injury

According to a recent Nationwide Retirement Institute long-term care poll, over half of all Americans fear falling more than cancer. While 80 percent believe that living in a single-story house is crucial as they age, 68 percent of those who are not yet retired say their present home includes stairs. ⁷

Care for the Elderly

Seven out of ten individuals want family members to help them with long-term care if they need it, but most don’t want to burden their loved ones.

That’s quite a conundrum. Being able to share your possessions or pay family members to care for you is one option to alleviate this strain. This is especially crucial if one of your children has to work less hours or stop entirely to care for you. By pooling your funds, you may be able to fulfill your desire for family care without putting your children’s livelihood at risk.

Content prepared by Kara Stefan Communications.

¹ Fidelity. “2021 Couples & Money Study.” https://www.fidelity.com. Accessed March 7, 2022.

² Veronica M. Lamarche. Psychology Today. Feb. 9, 2022. “For Couples, a Happy Retirement Requires Shared Goals.” https://www.psychologytoday.com. Accessed Feb. 9, 2022.

³ E. Napoletano and John Schmidt. Forbes. March 25, 2021. “Top 4 Retirement Worries—And How To Handle Them.” https://www.forbes.com. Accessed Feb. 9, 2022.

⁴,⁵,⁶ Insurancenewsnet.com. Feb. 8, 2022. “Hard Times: 7 In 10 Americans Say They’re Living Paycheck To Paycheck.” https://insurancenewsnet.com. Accessed Feb. 9, 2022.

⁷,⁸ Ayo Mseka. Insurancenewsnet.com. Feb. 7, 2022. “Nationwide: Two-Thirds Of Adults Worry They Will Become A Burden.” https://insurancenewsnet.com. Accessed Feb. 9, 2022.