Almost 50% of Americans are running into 1 major risk during their retirement. How to protect yourself and your money
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Without a well-defined plan for spending in retirement, Americans could be facing unexpected and unnecessary stress.
An Allianz Life Insurance study revealed that only 44 % of Americans have a retirement income plan (1). That means more than half may be running into retirement without a clear understanding of how they’ll turn their savings into steady income during their golden years.
Allianz’s Vice President of Consumer Insights, Kelly LaVigne, noted, “if you don’t know how you will draw from your retirement assets for income, then you aren’t ready to retire.”
The financial consequences can creep in quickly. Without a plan, you could risk joining the 31% of Americans who are overspending in retirement, according to a report from retirement magazine 401(k) Specialist (2).
It may also be fueling the rise of “unretirement.” An AARP survey found that 38 million Americans over the age of 55 are currently looking for work — more than 2.5 times as many as 40 years ago (3). Among “unretirees,” 48% say financial need drove their decision to resume working (4). This is reinforced by BLS data, which found that 19.5% of U.S. adults over the age of 65 were still participating in the labor force (5).
If you want to avoid returning to work, having the right retirement strategy for how and when you’ll spend your income is key.
Thankfully, there are steps you can take to give yourself and your family peace of mind.
Having a plan really does pay off.
Research from T. Rowe Price found that individuals with a formal financial plan had two to four times more wealth when entering retirement compared to those without one (6).
With the help of a qualified professional, like those found through Advisor.com, you can easily plan when, where, and how you want to retire.
Advisor.com connects you with participating unaffiliated third-party registered investment advisors (RIAs) through its matching tool or provides personalized investment advice via its in-house wealth management service, Advisor Wealth Management.
From their database of thousands, you can find a pre-screened financial advisor you can trust. All you have to do is enter a bit of basic information, such as your ZIP code and a bit about your financial goals. From here, you can then set up a free, no obligation consultation to see if they’re the right fit for you.
Even if you’re confident in the amount you’ve saved for your retirement, LaVigne insists “it is critical to understand how those assets will be able to fund your life after you retire.” That’s why individuals with higher net worths should also consider consulting a professional to make the most of their nest egg and the rest of their assets and portfolio.
If you have a substantial nest egg or are a high-income earner thinking about maximizing your retirement, you might want to consider working with white-glove financial experts.
That’s where services like Range come into play. Range is a CFP-backed and AI-driven platform that can help high net worth investors minimize their tax exposure, grow their portfolio and optimize their investment strategies — all essential parts of a successful retirement.
Unlike many other white-glove advisorial services, Range offers flat-fee pricing and 0% AUM fees. By comparison, traditional advisors typically charge 0.5% to 2% AUM fees.
Range also provides innovative tax and financial planning expertise — from tax segmentation analysis for real estate through their partners to the backdoor Roth IRA contribution method. The financial experts at Range understand high net worth individuals and the diversity of assets under their portfolio.
Another big concern among those surveyed is how to best take distributions from their retirement savings when they do retire, with 45% revealing they’re unsure of the best method.
This question is best answered with the help of a financial advisor, and it will largely depend on the type of accounts that you have.
With most IRA accounts, you will pay taxes on the funds you take out. So, the timing of these withdrawals really matters for the potential income tax you’ll incur.
However, with a Roth IRA, you contribute to your account with after-tax income, which means your withdrawals at retirement age won’t be taxed.
This is why financial guru Suze Orman wrote that Americans should be putting “every single cent” into a Roth account in her book, The Ultimate Retirement Guide For 50 Plus.
And if you have a gold IRA, you’ll want to plan for whether you’d like your withdrawals to be as income, or as the physical asset.
One way to invest in a gold IRA is with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This can make it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
Finally, a plan is important because it provides your loved ones with security, too.
For workers, an emergency fund doesn’t just safeguard against a job loss. It can also be the ticket to covering surprise expenses without going into debt. And being retired doesn’t make you immune to surprises.
For instance, if you’re concerned that Medicare might not cover all your health care expenses or if you want a little more financial security in retirement, there are other insurance options you can consider
If you’re concerned that Medicare might not cover your expenses, there are other insurance options you can consider. Without proper planning, paying for long-term care could deplete your retirement fund. In many cases, the burden of paying for care then falls on family members – potentially straining their finances.
Long-term care insurance offers coverage for the costs of in-home assistance, nursing homes or assisted living facilities.
Traditional health insurance covers certain medical needs in old age, such as prescriptions and doctor visits, but it doesn’t always cover the extra support many seniors eventually need.
That’s where long-term care insurance comes in.
If you’re worried about handling those costs on your own, it may be worth exploring coverage options.
One option is GoldenCare, which offers comprehensive long-term care insurance policies. They included hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living and traditional long-term care insurance.
Because long-term care isn’t one-size-fits-all, GoldenCare lets you tailor coverage to your needs and budget.
You can get one-on-one customer service from Goldencare Long-Term Care Specialists to help identify the best coverage options for you and your budget.
Having a suitable retirement plan isn’t only important for your financial goals. It’s just as critical for your peace of mind.
Of those surveyed by Allianz Life, 48% worried about living too frugally and not enjoying retirement as much as they should.
Without a clear set of steps for how you want to prepare for — and live — in retirement, you’re subjecting yourself to unnecessary uncertainty. You may be spending more frugally than necessary, or you might not be frugal enough to make those savings last.
Before you can fine-tune your retirement strategy, you need to understand where your money is going today. Hidden subscriptions, creeping expenses and forgotten bills can quietly throw off your plan.
You can let Rocket Money work behind the scenes to keep your finances on track.
With the app’s premium Net Worth feature, you can link all your accounts — banking, investments, retirement, property, vehicles, and even manually added items like jewelry — and it shows your assets versus liabilities in real time, no spreadsheets required.
With free tools like subscription tracking, bill reminders, credit scores, and budgeting basics, plus premium features such as automated savings and customizable dashboards, Rocket Money makes it easier to see the big financial picture, stay on top of your investments, and keep you focused on building your wealth.
As you get closer to retirement, every dollar starts to matter more. Although budgeting and planning ahead help, you could also tap into deals and discounts tailored to older Americans.
Reputable organizations like AARP are designed to support retirees like you during the golden years.
AARP offers discounts on almost everything — from prescriptions and dental plans to travel, entertainment and insurance.
Even better, AARP members get access to guides that can help you make the most of Social Security, choose the right Medicare plan, and uncover other government benefits — potentially saving you thousands.
