“You know what they say about assuming…”

“You know what they say about assuming…”
04 Aug 2015

Retirement planning has never been more difficult. The days of working 40 years uninterrupted at a company, getting a pension and a gold watch are gone. Social Security has big concerns and the stock market seems to be more volatile than ever. Here are my top 4 retirement assumptions you can no longer make:

  • Your retirement assets need to last 30 years
    • It is estimated that approximately 25% of 65- year- olds will live past 90 and 10% will live past 951. It’s very possible that today you will need to plan for a retirement of 40 years or more!
    • The traditional “4% rule” needs to be looked at more closely.  The sequence of returns on a portfolio in retirement during withdrawal will have tremendous impact on your probability of success.
  • You will have control over “when” you retire
    • Voya Financial found that 60% of retired U.S. workers said they had to stop working unexpectedly. That’s a very large number of plans that imploded due to unexpected circumstances.
    • 33% of those in the study said they left involuntarily. This could be due to health, needing to care for a spouse or simply losing their job.
  • You will be married when you retire
    • The fact are divorce rates of couples 50 and up are on the rise
    • 25% of divorces are occurring in people over the age of 50
    • Second marriages later in life can complicate not only retirement, but also your overall estate planning.
  • Spending always goes down in retirement
    • Retirees often see a spike early as they see increased travel, extra socializing, home repairs and new hobbies.
    • Just as those expenses begin to drop with older age, increased medical expenses can often offset this.

There are more, but these are the top assumptions we believe all new retirees need to reevaluate.

Good Luck!!
Jeff Johnston

1. www.ssa.gov

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Premier Investments of Iowa, Inc. are not affiliated.

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Jeffrey Johnston

Jeff has over 30 years of experience in the investment industry. He currently holds his FINRA Serices 6, 63, 66, 7, 24 & 51 licenses with LPL Financial as well as his health and life insurance licenses.