Even though I frequently write about retirement and have been contemplating the many facets of retirement since college, I still have certain concerns. While planning and preparing is good, it doesn’t mean that things still can’t go wrong in our golden years. Therefore, I’ve outlined some of our biggest retirement concerns and how we hope to combat the possibility of them hitting us when we’re most vulnerable.
Being forced into high-risk investments
Due to lack of safe assets with reasonable rate of return like certificates of deposit and savings accounts right now, should a situation like this continue into retirement, we could be pushed toward higher-risk investments in hopes of better returns. And retirement typically isn’t the time to start getting risky with money.
To combat this concern, should interest rates remain low, we may stick with things like government savings bonds for our cash savings since we can put money into series-I bonds which are inflation based and have often offer us returns of between two and five percent over the long term.
No Social Security
Social Security can plan a big roll in retirement; and maybe that’s just the problem. With the future of Social Security less than secure, it puts some definite questions in our mind about what part and how big a part it will play in our retirement future.
However, part of combating Social Insecurity comes with knowledge and planning. Gathering information such as how much estimated benefits will be, what they could be at different retirement ages, and similar information can be gathered at the Social Security Administration website by signing up for the Social Security Statement. Then, by factoring the knowledge that by 2033, old age benefits could be reduced by 25 percent due to insufficient funding of Social Security, we can begin to build a plan that factors these benefits into our future, yet doesn’t count on them. In this way, we aren’t setting ourselves up for failure by counting on benefits that may never appear or at least not appear in the amounts for which we’d hoped.
Not leaving an inheritance
Our final concern at this point when it comes to retirement is not being able to leave something behind for our children. We want our kids to have a better start than we did, and while we aren’t looking to overdo it when it comes to an inheritance, we’d like to follow Warren Buffett’s advice to leave our kids, “…enough to do anything but not enough to do nothing.”
By doing things like avoiding investments like annuities and reverse mortgages that can eat into our available assets, and by trying to utilize things like Social Security (if it’s still there) before our own money, we hope to leave our kids at least something to get started with in hopes of them being able to pursue dreams and passions rather than just get jobs.
In these ways, we hope to combat some of our greatest retirement concerns while still maintaining some semblance of a normal retirement lifestyle in the process.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.