The Risk of Living Too Long

October 19, 2018

 

 Think accumulating assets to fund your retirement has been difficult? Just wait until the time comes to begin distributing these assets.

 

Most of us view risk and risk management as protecting ourselves and our families against a loss such as property, income or life. Longevity risk, however, comes from having too much of something – years of your life.

 

If you started working and saving for retirement at 20, took early retirement at 50 and live until 79 (the national average), you could easily take as many years to spend your nest egg as you did to build it. As medical technology increases along with life expectancy, the chance exists that you or your spouse will live past the age of 80.The longer you live, the greater your risk of outliving your money.

 

Planning how to make your money last as long as you do can be complex. For example, you can begin taking withdrawals from your IRA at age 59½, but should you? You must take minimum IRA distributions beginning at age 70½, but what if that pushes you into a higher tax bracket. Deciding which assets to tap when, and with what tax and investment consequences, can be overwhelming. You may need to reallocate or even liquidate investments to provide cash flow for daily living expenses, avoid as much in taxes as possible and account for potential market downswings. Strategies for repositioning your portfolio and liquidating assets can take years in order to avoid high tax bills.

 

Longevity risk carries within it the increased risk of disability in terms of caring for yourself. Genworth’s 2015 Cost of Care Survey showed that the average cost for a private nursing home room increased 4 percent over the past 5 years, to $91,250 a year or $2450 a day. Even assisted living communities average costs increased 2 percent. Many people mistakenly assume that Medicare will pay for nursing home stays. It does not. Long-term care insurance can range from nursing level only to complete in-home and companion care. You should consider purchasing long-term care coverage while in your 40s or 50s to secure a reasonable premium.

 

The stadium rock band Queen recorded a song for the movie Highlander titled Who Wants To Live Forever? It may not be forever, but Americans today certainly live longer than their ancestors. Finding ways to fund those extra years can help you have quality of life, not just quantity.  Written by Securities America

 

Back to my page

Share on Facebook
Share on Twitter
Please reload

Featured Posts

Deciphering Financial Aid Alphabet Soup

July 7, 2017

1/5
Please reload

Recent Posts

October 26, 2018

Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

801 S. Fillmore, Suite 530

Amarillo, Texas 79101
806.331.2600

advisor@navigationfinancial.com

Click to check the background​
of this firm FINRA's BrokerCheck

The BBB has determined this business meets accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses pay a fee for accreditation review/monitoring and for support of BBB services to the public. BBB accreditation does not mean that th ebusiness products or services have been evlauted or endorsed by the BBB, or that the BBB has made a determination as to the business product quality or competency in performing services.

Navigation Financial Group is not a CPA Firm. Advisor Representatives are Registered Representatives of and offer securities through Securities America, Inc., member FINRA/SIPC. Planning and Advisory Services available through Securities America Advisors, Inc. $ymbil is offered by Ladenburg Thalmann Asset Management, Inc. (LTAM). Navigation Financial Group and its affiliates are independent of Securities America and LTAM. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed. Not FDIC Insured, No Bank Guarantees, May Lose Value. Not a Deposit and Not Insured by any Government Agency. As of January 1, 2020, the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal inforamation.

© 2020   |   All Rights Reserved