A guide to retiring with confidence

a guide to retiring with confidenceResearch shows that among the things that keep people awake at night, retirement issues always rank near the top, including finances, health, and protecting the assets they would like to pass on to others.

For many Americans, retirement confidence remains tenuous at best. 19% of American workers are “not at all confident” about retirement, or the finances that underpin it, such as having a nest egg large enough to last a lifetime.

The good news is that the general public’s overall confidence about having enough money for a comfortable retirement has been increasing, after plummeting to record lows between 2009 and 2013. According to the 2016 Retirement Confidence Survey, 21% of today’s workers are “very confident” while 42% are “somewhat confident” that they are prepared.

Taking the following additional steps can further solidify that confidence…

Size up your nest egg… One of the biggest challenges for retirement-minded people is determining how much they need to save to live comfortably during retirement. That calculation involves a range of factors, including what they already have (the assets in their nest egg, and the extent to which those assets are increasing in value), who they intend to support with that nest egg, what’s coming in (income), what they owe (debt), necessary expenses for now and in the future (such as food, shelter, healthcare/medical, etc.), and whether or not they desire to pass assets to heirs. Less than one-half of the survey respondents report that they’ve calculated this number, largely because it’s a difficult one to peg without the help of an expert. Therefore…

Consult your Vermillion Advisors regularly… There’s too much at stake to tackle this by yourself. Having your Advisor looking out for your best interests gives you a better chance of working through key retirement issues, which in turn inspires confidence. Maintain that confidence by meeting regularly with your advisor to help keep you on course.

Don’t waste energy fretting about the wrong things… The odds of the Social Security system going broke are about zero. You’re better off focusing on real issues such as the probability that you’ll need some form of long-term care in your lifetime.

Be clear about things you can’t control but can plan around… Things such as inflation, investment rates-of-return, interest rates, changes in tax rates, etc. are all out of your control, but your VFA advisor can suggest strategies that minimize their negative effects within your portfolio.

Be clear about the things you can control, and then take steps to control them… Factors such as the timing of your retirement, your spending habits, how you allocate your investment portfolio, and how you take care of yourself physically, are issues that can have a major impact on your retirement outlook. Your increased control in these areas also raises your retirement confidence. Here are several things you can do to determine your own destiny:

Participating in a retirement plan. Saving for retirement through a vehicle such as an individual retirement account (IRA) or employer-provided 401(k) plan is key to a comfortable retirement, and to retirement confidence. Workers who lack a retirement plan are not at all confident about their financial security in retirement.

Addressing debt. You shouldn’t be wasting money paying high-interest rates on credit cards. When your debt is under control, those funds can better serve you as part of your retirement plan.

Planning for potential health and medical expenses, including long-term care. 42% of survey respondents identified covering healthcare expenses as one of the financial issues they expect to be most challenging in retirement. Whether using specifically earmarked funds or some kind of insurance policy with long-term care or critical illness coverage, you need to plan on how you’ll cover the potentially high costs of medical care during retirement.

Developing a financial plan that addresses your retirement issues. You and your plan will need to be flexible to accommodate changing life circumstances.

Working with your Vermillion Financial Advisor to plan and prepare for retirement will go a long way to relieve your anxiety, give you a clearer picture of what to expect, and raise your retirement confidence. It goes hand in hand with the freedom to enjoy the peace of mind that comes with a financially secure retirement.

a guide to retiring with confidence

Note: The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendation for any individual. Please remember that past performance of investments may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this post serves as the receipt of, or as a substitute for, personalized investment advice from Vermillion Financial Advisors, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed within this newsletter to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.