Scott and Linda (not their real names) are in their 50s and have done a lot of things right: They’ve worked hard, saved and invested, and they’ve been practical in their spending.
They feel like they’re well on-track to a secure retirement; but, a few “wild cards” do have them concerned:
- Inflation and longevity: They know what’s happened to their purchasing power over the last 30 years. They’re concerned about the next 30+ (maybe 40) when they’re living off their investments.
- Taxes: While there may be a temporary reduction coming now, they also know the U.S. is facing a $20 trillion debt and there will be 7 or more presidential elections – not to mention 15 congressional elections – that will take place in the next 30 years. That spells a lot of potential changes and changes in tax laws. They want old-age income that will be protected from the politicians.
- Health costs: A huge wild-card. They know the odds are about 50% one of them will need it, but they don’t want to see long-term-care insurance money going down the drain if they don’t need it. They also want money available if they do have a chronic illness.
- Liquidity: They want money available for emergencies during retirement without having to jump through a ton of hoops.
I thought you might like seeing a sample case study about how one couple addressed this issue.
Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991. Jim is Founding Principal of The Independent Financial Group, a registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.