Among the many perils facing today’s workers and retirees, four in particular stand out: longevity risk, inflation, market volatility, and abandonment risk. I wrote a post on this topic in June.
In this post, I’ll take a closer look at longevity risk — one of the most common retirement concerns. In fact, the risk of outliving their savings is a worry that keeps about one-third of workers and retirees awake at night, according to the Principal Financial Well-Being IndexSM (third quarter 2011).
Your retirement could span two decades or more (knock on wood), but have you considered whether your retirement savings will last? Well, your answer will depend on three things:
- How much you set aside now.
- Your withdrawal rate during retirement.
- How you invest your savings once you retire.
To stockpile enough income for retirement, most experts recommend saving between 10-15 percent of your annual pay throughout your career. If you haven’t done so, don’t give up; but start saving as much as you can, as soon as you can.
Where a lot of people get in trouble is when they try to determine a safe withdrawal rate. They retire with what seems like a lot of money in the bank; but then they start spending it, forgetting that money has to last. This might seem like a no brainer, but it’s easy to kick off retirement with lots of celebratory spending (world cruise anyone?) Read more
Imagine an apartment is rented in your name — by someone you’ve never met. This person also opens a new credit card account, sets up phone service, gets a car loan, and runs up medical bills. Then, when it comes time to pay for it all, you’re the person held responsible.
This lovely mess is the kind of thing that can happen after your identity has been stolen. And unfortunately, it happens a lot more often than you might think.
What’s one piece of financial advice that applies to everyone — young and old, rich and poor? Work with a professional.
Unfortunately, a lot of people think only the wealthy need professional financial advice. Let’s bust that myth once and for all.
In reality, it couldn’t be further from the truth. In fact, I would say that the less money you have, the more important it is to get good financial advice. After all, you have a lot less room for error.
There’s been a lot of rumbling in the news lately about the bond market.
With interest rates recently bouncing off of historic lows, the economic community is in general consensus that the end of a more than 30-year bull market for bonds is near.
While no one can predict the future of any investment option, there are signs of a sea change for the bond market.
According to Cogent Research, 48 percent of a financial professional’s time is spent retaining current clients.* If you’re an advisor, you’re clearly focused on your clients — but can that time be spent more efficiently?
As new research shows, you may be missing an opportunity to address what matters most to them: a clear understanding of their ultimate investment goals and a plan for achieving those goals.*