2020: Retirement Now in Crisis? | Retirement LeadGen Web Widget 728x90 SECURE

2020: Retirement Now in Crisis?

Introduction

Retirement

The coronavirus has come and flipped most of our worlds upside down. As a financial planner, I can say that none of our scenarios could have predicted an event such as this in such a short period of time. Now, it looks like we will be adding a global pandemic to our “what if” scenarios. Even though most people around the world have been affected by the pandemic, those who are planning to retire this year or within the next 5 years may be faced with some of the hardest choices in the coming months. 

I have been in contact with many of my clients during this situation who are in the process of making this exceedingly difficult decision. I am fortunate to have planning software that allows me to illustrate how this decision will impact their family’s financial future. This is one of the many tools in the toolbox I utilize to help my clients reach their financial goals.

What If's and Worst-Scenario

I just mentioned tools in the toolbox; utilizing these tools are how most financial advisors/planners work with clients towards achieving their goals. I am not saying that we are all the same in that we will always recommend the same products and services, but most of us do have access to similar products. 

When it comes to something as important as retirement income planning and how to make your savings last for the rest of your life (however long that may be), do you really want to leave that up to chance? I bet a lot of financial advisors and clients would all say, “what are the chances that I will run out of money if I take a simple withdrawal of $$$ each year?” Most of the time, they’d be right, and maybe you will not run out of money, but…

  • What if there is a pandemic or a market downturn during the years in which you retire?
  • What if something happens and the hard-earned money you saved isn’t there to support you and now you must go back to work? 

All I am saying is, is it not better to be prepared for the worst-case scenario than take unnecessary risks? What if there was a way to do both? Would that be something you might be interested in? There is no way that you can know all the options until you speak with a professional.

Retirement

Speak With a Professional

If you speak with a well versed CERTIFIED FINANCIAL PLANNERTM Professional, retirement income planning is one of their core standards. They should be able to run every possible (and maybe even a few outlandish) scenarios to determine how your portfolio can handle risks. The main thing you will want to do is figure out how much money you are spending monthly, then figure out how that grows each year. Once you find your expenses, look at what sources of guaranteed income you have coming in. If you have enough guaranteed income coming in to cover all expense for your expected retirement years, here are 5 things you can do right now, you might feel like that is good enough. 

What I like to do for clients is find a reliable income source that can provide all the current and future income, and once that income is defined we can start to look a little more creatively at preserving assets while maintaining minimum required income. I think we need to factor in healthcare costs in retirement and long-term care costs. If you are independently wealthy and able to self-insure, good for you, this article is not for you.  However, if you are able to self-insure, you probably realize that leveraging your risk is a better way to do things.

  • You purchase life insurance to protect your family against your premature death.
  • You purchase home and auto insurance to protect your family against severe damage to or loss of an asset.
  • You purchase or have disability income insurance to protect your family against loss of income during your working years.

Why wouldn’t you want to protect you and your family against outliving or prematurely losing your retirement income?

Conclusion and Subscribe

In conclusion, not one plan or scenario is right for everyone, because not everyone has the same risk tolerance or the same concerns. However, I do believe that everyone should at the very least have the hard conversations about what they will do if something unexpected were to happen. Having been in this line of work, I have seen what both good and poor planning can provide when the unexpected happens. I plan to share stories via this blog moving forward, so subscribe here. I look forward receiving questions at my compliance approved email address, michael@millenniupg.com. Feel free to ask me anything.

Contact Me

If you or anyone you know is interested in learning more about how Millennium Planning Group can help you manage retirement during a crisis and reach your goals do not hesitate to ask a question here.

Michael Whitman is an advisory representative offering investments and advisory services through Lincoln Financial Securities, Member SIPC. LFS-3072108-050520