Tips to make your retirement savings last

PennylessOutliving your savings. Those are 3 scary words that most retirees do NOT want to hear! Even if you’ve planned carefully and have a sizable nest egg, living longer than your money is still a possibility. What can you do to alleviate these concerns? Read on for Cornerstone’s 5 steps for retirement security!

1) Buy longevity insurance 

With this type of insurance, you give the insurance company a small premium at the age of 65. The insurance company invests it until you’re in your 80’s and then begins paying you in monthly increments for the rest of your life. A policy like this might typically cost around $25,000 and would pay out $3,000 per month when you turn 85.

The timing on policies like these are ideal because the payouts are coming at a time when you are likely to start acquiring some significant medical bills and if you consider the years of inflation on your nest egg, these could really diminish your resources.

Using this approach for your financial planning makes it easier to plan long term because your payout date is determined when you buy the policy. You will know exactly what you have coming in the future, as you move through your initial retirement savings.

2) Delay taking Social Security

The longer you wait to start collecting your Social Security benefits the more your monthly retirement benefit will increase.

For example, 66 is the full retirement age and if you start collecting at that age you will receive 100% of your retirement. However, if you delay until you’re 67 years old to start collecting, that benefit goes up by 8%.

The longest you can wait is until age 70 and if you do this you will get 32% more than you would have gotten at full retirement age.

3) Get a job

If you’re able to take on some part time work you can put some extra cash in your pocket and this will allow you to delay withdrawing your Social Security for as long as possible. There are lots of great companies that are happy to hire retirees!

Here’s a great way to search for companies that are looking to hire those over 65. Senior Job Bank

4) Consider Long-Term Care Insurance

It’s really impossible to know what the future holds and what types of help and medical care you will need as time goes on.

Long Term Care insurance can provide a safety net for you and your family in the event that you have to use In-Home care, or Long-Term care services in a nursing home or assisted living facility. Some of these policies even provide benefits to your care-giver when they need a break!

There are also Life Insurance policies that can have Long-Term Care riders added to them. These are great because if the benefit isn’t used, it passes tax-free to the policy’s beneficiary! That is a win-win for everyone!

5) Find a good Financial Planner

All the information shared above is a great way to get started, but to truly assess all your specific financial needs and to determine which of these things would benefit you and your family the most, what you really want is a thorough financial review, conducted by a professional who has been trained to make sure that you get the most out of your retirement! Cornerstone has dozens of agents ready to work with you whenever you need us, in the comfort of your own home and at NO COST to you EVER. Here is a great article that shows what SHOULD happen at a typical Financial Review appointment and tips for making sure your agent is really doing their job!

The Importance of Fact Finding

Whatever your plans are for your future, we all want the same thing. Security! Cornerstone would like to help you optimize your chances at a safe, happy and secure retirement. Contact us today for more information!

Also see: Financial Tips for Baby Boomers and Facts about Retirement

Two simple steps toward a comfortable retirement…

Don’t make the mistake of counting on high market returns to fund your retirement.

Action Plan to an Anxiety-Free Retirement – Part 1

Senior couple in sports car

STEP 1 | Kiss market risk good-bye with an automatic savings plan


When the stocks take a sudden plummet, many investors panic and start seeking alternate ways to ensure a successful monetary outcome. The good news is that there is a simple solution to help ensure a secure retirement regardless of the market’s ups and downs. The best part? It might even be free to you, through your employer!

Many companies are offering automatic yearly increases in contribution rates to their employees’ 401(k). Currently close to 1/3 of employers have this option, but even if they don’t, you can make a habit of gradually increasing your savings annually in the same way a “cost of living” raise would usually kick in. Maybe choose to make the increase, each year on your birthday or another anniversary that’s easy to remember.

This step might seem simple, but don’t be deceived, there is a lot of bang for the buck here! More than 70% of employees who automatically increase their retirement are on track to a more comfortable retirement, according to Rob Austin, the director of retirement research at Aon Hewitt.* And if you compare this to the average success rate of only 20% you can see why this concept is a valid consideration!

You can trick your brain…It might seem silly, but there is a psychological aspect to automatic saving that makes it less difficult. Psychologists call this behavioral quirk “loss aversion” and it’s the basic idea that it’s much harder to give up a dollar you already have in hand, than it is to “lose” it before you ever see it. Somehow the sacrifice isn’t felt as intensely when saving is carried out this way.

Risk is reduced… And obviously, saving more helps you to steadily build your wealth. But let’s circle back to the issue we mentioned in the title of this article: Being immune to market highs and lows. If you have a steadily growing savings plan you are less dependent on high returns from the market.

Here’s an example. Imagine Jane, a 30 year old, starts saving 15% of her salary. If she works until age 67 she can reach a preset goal of having enough money to replace 75% of her pre-retirement income, even if her investments only deliver at 6% or less. Now Jane is free to invest however she wishes. Can she take a plunge and dive into something risky? Sure! Or what if she wants to conservatively and carefully invest so as not to lose anything? Play it safe. Either scenario works because she has the guaranteed savings plan to back her up, regardless of what happens with her investments.

STEP 2 | Don’t be scared to ask for help!

 


No matter your age or the stage of retirement planning you are currently in, you will learn and grow by seeking help from those experienced and trained in these areas.

Many financial planning companies are glad to do an annual financial review to help you determine where you currently stand and what you need to do differently.

Whoever you turn to, make sure they gather ALL the data. Don’t let them advise you without a full picture of your financial situation. This includes your life and health insurance and ANY investments you have, plus the simple stuff, like your savings bonds, and rainy day cash in your savings account- and don’t forget all your expenses as well. Which ones will continue into retirement, and what extra liabilities may you take on in the future? It all matters and it’s important that whoever is giving advice has a full understanding and awareness of exactly what you have to work with.

The bottom line: Don’t be afraid to ask questions and be innovative with the way you map out your future! The younger you start the better, but it’s NEVER too late to make changes that can help you in the future.

Cornerstone Wealth Advisory Group has a team of professionals dedicated to retirement and financial planning. Contact us for more information and to schedule your annual review. (always at NO COST to you)

www.cswta.com

866-262-2245

 

*This firm defined success as saving 11 times salary by age 65

The Perfect Gift

Grandparents And Grandchildren Reading Book On Garden Seat

Birthdays, holidays, various childhood milestones… As these come and go for your grandchildren you may spend much time searching for the perfect gift. It can be hard to know what to buy and obviously you want the money you spend, on the person you love, to be put to good use! Toys break and fall apart, clothes are outgrown, cash may be spent frivolously…it can make it a challenging decision!

It might sound a little strange, but many parents and grandparents are giving a new kind of gift to their family members. Life Insurance. Gifting a life insurance policy is a wonderful way to show your love and give a gift that is meaningful that serves a useful purpose.

A life insurance policy is an investment that can last the child’s entire life! It won’t break, wear out or fall apart over the years. These policies can be set up to earn cash value that accumulates over the years. This cash value can be withdrawn by the recipient at a later date and used for a variety of things. Imagine your gift going towards helping them purchase their first car, or even better, their first home! It could pay college tuition, or help them start a business. What a great way to show that you care about your grandchild’s future, when the gift you give them today can give them financial security in the future!

Another great feature of gifting a life insurance policy to a child, is that the premium rate locks in using their current age. Typically life insurance premiums increase with age, but starting young they will have their current rate for life!

In addition, this can help to guarantee their future insurability. Sadly, there’s no way to know what the future may hold or what unexpected illnesses may befall anyone. Sometimes illnesses like diabetes, heart disease, chronic lung problems etc. can keep a person from qualifying for good insurance at an affordable rate. Thankfully if the child’s policy is set up now, they will have future occasions to increase the benefit, if they desire, regardless of their health.

These are just a few of the reasons that a children’s whole life policy can be a wonderful, lasting gift. Cornerstone has many great options and we’d love to help you put together a memorable gift for your loved one’s next special occasion. Reach out to us today to speak with an agent for a consult at NO COST to you!