Retirement Money Needs to Last 40 Years

While most Americans are afraid of running out of money during retirement, there is also the fact that Americans are living longer.  If you're a healthy 65-year-old male, you have a 50-50 chance of living to the age of 85 and for the same aged-female, it's also a 50-50 chance of living to the age of 88.  If you retire at the age of 60, that money needs to last 30-40 years.  Joe Lucey, a Certified Financial Planner and contributor to Wall Street Journal Marketwatch, asks in his article, "How to Go Forty Years Without a Paycheck," if that's possible. 

While Lucey believes the industry has done a wonderful job of telling Americans how to save, he says Baby Boomers are now finding that they're having to figure out how to make sure that lasts a lifetime so they can spend in confidence.  He says that one thing every Baby Boomer should be doing today with 5 years of retirement is to look at some of the benefits that are out there to guarantee lifetime income, such as social security, pension maximization or even creating personal pensions. 

 Joe Lucey  Source: set2retire.com

Joe Lucey

Source: set2retire.com

Lucey says that our industry has built these retirement plans around the notion that it's about accumulation of assets so many families are finding today that they have the option of being in the market or out of the market and it's either "switch on or switch off," which is why, he says, it's so important to know what your options may be.  There may be better options out there to help protect your principle or create lifetime income, he adds.

Another piece of advice Lucey offers is to make sure you're working with someone who can look at the overall retirement plan.  There are a lot of advisors out there still selling packaged products and so getting a comprehensive plan that goes beyond the investment allocation is important.  It should include taxes, lifetime income strategies, how you're going to leave this legacy of money and healthcare concerns.  "You should be looking for somebody that has the credentials and experience that works with families like you that are in the same situation," Lucey says and that are in the process of taking the money back and not double or triple their money over the next 10 years.

Joe Lucey is a Certified Financial Planner and contributor to Wall Street Journal Marketwatch.  To read his article, "How to Go Forty Years Without a Paycheck," click here.  He spoke with Retirement News Today, providing online retirement news video content and is a featured Network of Sequence Media Group.

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