No matter where you are in your retirement journey, a financial advisor may be able to provide you with potentially valuable information and advice. A comprehensive retirement plan tailored specifically to your situation could have a major impact on your retirement: It may help you avoid common retirement pitfalls and mitigate risks. Here are 3 potential retirement challenges you can plan for.

Longevity

While a longer life is certainly a blessing, with it comes the risk of outliving your money. Considering the expensive healthcare costs in old age, the staggering cost of long-term care and the fact that Americans continue to live longer, running out of savings in retirement is certainly a possibility. However, there are options for protecting against this. While Social Security can provide reliable lifetime income, it’s only designed to replace about 40% of your pre-retirement income,^[1] and may replace less depending on your lifestyle. We can help you decide on the best retirement income option for you, whether you have a pension and are unsure of your payout strategy, or you’re wondering how to turn your retirement account savings into lifetime income. 

Current and Future Taxes

A change in leadership in Washington and a growing national debt could potentially mean higher taxes in the future. Starting at age 72, IRAs, 401(k)s, 403(b), 457, and Thrift Savings plans are subject to Required Minimum Distributions (RMDs). The purpose is to draw down your account and tax the funds that have been growing tax-deferred for many years. RMDs are one reason why your tax burden could increase in retirement. There are many strategies available, including a Roth IRA conversion, in which you pay tax on contributions instead of distributions. Roth IRAs are also not subject to RMDs and can be used in addition to a traditional IRA or 401(k) to help minimize taxes.

Increasing Interest Rates

Low-interest rates can be great for people buying a home or taking out student loans, but those rates are now rising.^[2] Although mortgage rate increases may affect your budget, when lower-risk investments like CDs and bonds increase their interest rates, it can actually provide you with safe earnings and an increase in income. Interest rates are increasing, and they could keep increasing for the foreseeable future, but it’s not easy to tell how things will play out given this unique market environment. An advisor can help you assess your investment options and create a plan aimed at preserving your income for the future.

An advisor can look at how these retirement challenges could affect you, and help you develop a plan that is tailored to meet your unique needs. We’re also here to help you adapt this plan in the case of financial and life changes, as well as policy changes. Our complimentary financial review is the first step to creating a comprehensive retirement plan and a strong relationship with an advisor that could last your lifetime – get in touch to sign up.