Will you have enough money in retirement?

June 1, 2021

Will you have enough money in retirement? Many people have no idea or even understand all of the unexpected expenses that might pop up in retirement. Here’s six essential questions to ask yourself to help you find out if you will have enough money in retirement.

Question #1.

How much do you spend right now?

A lot of people think they know what they’re spending every month, but if you start saving your receipts and recording your expenses, you might be surprised at what you learn. For at least three months, keep track of all your spending. Note necessary costs like groceries, gifts, eating out and savings. Record everything. It’s important to know not only what you spend, but what you spend it on.

Question #2

How will your spending change in retirement?

Do you dream of traveling? Do you plan to move out of state? While some costs, like traveling to and from work, should go down, other factors may bring additional expenses. Consider the costs of a cross-country trip, or the possibility of medical needs or illnesses that need long-term care. It’s important to be realistic about your retirement goals and lifestyle needs when calculating retirement income.

Question #3

Will family issues affect your spending?

While we hope our children will be grown, employed and pursuing their dreams when we retire, that may not be your reality. If you have an adult child or a grandchild to support, it may change the way you plan for retirement income. Also, it’s important to consider the complexities that may arise if your spouse was to die. Think about the lost income and tax implications.

Question #4

Will your taxes be higher or lower in retirement?

Predicting tax policy is tricky, but there are some things for which you can prepare. For instance, if you have a lot of assets in pre-tax retirement accounts, any distributions from those accounts could push you into a higher tax bracket. Or, if you aren’t withdrawing from those accounts appropriately, you may incur penalties. Working with a financial advisor from our team can help you prepare for any future tax changes and avoid unnecessary taxes or penalties.

Question #5

How can inflation impact your retirement accounts?

We can’t predict the future, but it seems reasonable to prepare for increases in inflation over the course of retirement. It doesn’t take long for even small changes in inflation to add up. This should be factored into your retirement income strategy, and we can help you identify strategies to address the potential impacts of inflation on your retirement assets.

Question #6

How long will you live?

 If we knew the answer to this question, planning for retirement income would be much easier. Life expectancies will vary, but in general, people are living longer than ever before. That means your retirement could last much longer than your parents’ or grandparents’ retirements. The longer you live, the more factors like health care costs and inflation are likely to impact your retirement income. Consult with a financial advisor to discuss your approximate life expectancy and how you can prepare for the possibility of a long life and long retirement.

These are important questions to ask yourself that can help you prepare for retirement – but this is just a start. Be sure to speak with a financial advisor to get a clear understanding of what your retirement income will look like. If you don’t have a financial advisor or have more questions about planning your retirement income, don’t worry, you can call us! We’re available for complimentary meetings or phone consultations to talk this out for you. You can find us and more resources at eabuck.com.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 902028- 5/21.

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E.A. Buck Financial Services,
55 Merchant Street, Ste. 2100 
Honolulu HI 96813,
8085452211.

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