What steps might help you sustain and grow your retirement savings?
Provided by Stuart Cooper, CRPC®, Gerran Batterberry & Michael Pozzi
“What is your greatest retirement fear?” If you ask any group of retirees and pre‐retirees this
question, “outliving my money” will likely be one of the top answers. In fact, 51% of investors
surveyed for a 2019 AIG retirement study ranked outliving their money as their top anxiety.1
Retirees face greater “longevity risk” today. The Census Bureau says that Americans typically
retire around age 63. Social Security projects that today’s 63‐year‐olds will live into their mid‐
eighties, on average. This is a mean life expectancy, so while some of these seniors may pass
away earlier, others may live past 90 or 100.2,3
If your retirement lasts 20, 30, or even 40 years, how well do you think your retirement savings
will hold up? What financial steps could you take in your retirement to try and prevent those
savings from eroding? As you think ahead, consider the following possibilities and realities.
Realize that Social Security benefits might shrink in the future. For decades, Social Security
typically took in more dollars per year than it paid out. That ongoing surplus – also known as
the Social Security Trust Fund – is now projected to dry up by 2035. Congress may act to
address this financing issue before then, but the worry is that future retirees could get slightly
less back from Social Security than they put in. It may be smart to investigate other potential
retirement income sources now.4
Understand that you may need to work part time in your sixties and seventies. The income
from part‐time work can be an economic lifesaver for retirees. What if you worked part time
and earned $20,000‐30,000 a year? If you can do that for five or ten years, you effectively give
your retirement savings five or ten more years to last and grow.
Retire with health insurance and prepare adequately for out‐of‐pocket costs. Financially
speaking, this may be the most frustrating part of retirement. You can enroll in Medicare at age
65, but how do you handle the premiums for private health insurance if you retire before then?
Striving to work until you are eligible for Medicare makes economic sense and so does building
a personal health care account. According to Fidelity research, a typical 65‐year‐old couple
retiring today will face out‐of‐pocket health care costs approaching $300,000 over the rest of
Many people may retire unaware of these financial factors. With luck and a favorable
investing climate, their retirement savings may last a long time. Luck is not a plan, however, and
hope is not a strategy. Those who are retiring unaware of these factors may risk outliving their
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note ‐ investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
2 ‐thebalance.com/average‐retirement‐age‐in‐the‐united‐states‐2388864 [1/27/19]
5 ‐fidelity.com/viewpoints/retirement/transition‐to‐medicare [5/31/19]