Retirement anxiety some times sets in when least expected. After all retirement is literally a life changing event that we all want to go smoothly for the rest of our lives. However none of us know what the future will bring our way, so perhaps it is only normal for the most eager retiree to feel some apprehension, this is, for the most part to be expected.
Retirees who spend some time gathering information in order to answer their questions will feel much more confident making all their decisions.
Here are some guidelines-
Five Key Questions
- How much income do you need in retirement?
- What sources of guaranteed income to you have?
- What is your risk tolerance?
- How many years can you live in retirement?
- Do you want to leave anything to your heirs or charity?
Knowledge provides comfort, determine your consumption gap.
- Estimate your annual retirement expenses
- Consider your annual Social Security, annuity, pension income, and any other retirement assets you plan to spend during retirement
- The resulting difference is your retirement gap or surplus
Protect your retirement from a rising cost of living
- Social Security – This is most retirees first or basic income stream, Social Security usually provides a cost of living adjustment annually. However, there has been no cost of living increase since 2009
- Private Pensions sometimes provide cost of living increases, but many do not
Position a portion of your assets to deliver guaranteed income
- Understand your consumption gap and find ways to address it
- Honestly review your risk tolerance. It is one thing to risk a few dollars on a lottery ticket but quite another to put your retirement assets at risk of loss
- If the investment of your retirement assets is causing you to lose sleep reevaluate your risk tolerance
- Consider converting at risk retirement assets to annuities, which offer guaranteed lifetime income with increasing income potential
A good planner can help you with some of the calculations and projections listed above.
You may ask questions in the comments or contact me privately Tim Barton, ChFC