A surge of baby boomers reaching retirement age has made income planning more important than ever. Financial advisor Carroll Ramer explains the importance of income planning for retirees in this report.
Ramer points out that income planning is something retirees need to think about so that they don’t run out of money during their retirement years. Americans are living longer than ever, so retirees need to deal with longevity issues. The Federal Reserve System has made a two percent inflation rate part of its monetary policy. Other planning issues include stock market volatility and low interest rates. These things should be considered in financial planning for retirement.
The most common financial pitfall, Ramer says, is “not planning at all.” Ramer says that many people he talks with have no written plan for their retirement future. Social security is an important item in any retirement plan: the Social Security Administration says that retirees rely on social security for 40% of their income. Ramer says that there are benefits many people don’t know how to claim. A well-designed income plan for a retiree should take into account both wants and needs. We are all different, so no single plan will work for everyone.
People are still working should be thinking ahead. Younger people will still be in the accumulation stage of their lives, and they probably have more risk tolerance when it comes to investing. Once they reach ten years or less from retirement, they will probably want to start preserving their assets. The funds they have will probably need to last them from twenty to thirty years.
Carroll Ramer is a financial advisor with the Silver Lake Agency in Kasson, Minnesota. Retirement News Today is a featured network of the Sequence Media Group.