What Should Retirement Look Like


And If Walking Is Your Exercise Walk Fast

What Should Your Portfolio Look Like in Retirement?

Many research studies have found that how fast you walk after age 60 is a good gauge of longevity. Apparently, your walking speed can predict dementia, shorter life spans, and depression.

In one study, published in Neurology, researcher Dr. Joe Verghese says As a young researcher, I examined hundreds of patients and noticed that if an older person was walking slowly, there was a good chance that his cognitive tests were also abnormal.

Know Your Best Years May Be Yet To Come

This is likely to surprise you. I was kind of shocked. But, a few years ago researchers identified the two ages in an adults life when you are likely to be at your happiest.

Experts from the London School of Economics and Political Sciences found that happiness peaks at the ages of 23 and 69.

Whoa! Sixty-nine! That is older than many of us.

Learn more about the surprising age when happiness peaks.

How Much Do You Need To Save For Retirement

One of the hardest parts about preparing for retirement is thinking about life as a 70-something. A lot of people get so overwhelmed about saving for an unknown future, that they end up not saving anything at all. Thankfully, planning for retirement is not overly onerous, but you will need a road map one that can evolve over time to keep you on track.

The first place to start is to think about what your life might look like in retirement. Sit down with a pen and paper and write down your retirement goals.

Then think about how much everything will cost. We don’t know what prices will be like in the future, and in recent years inflation has run below the Fed’s benchmark of 2%, but the average inflation rate in the U.S. over the past century was 3.22%. So plan for higher prices in the decades ahead. You’ll also want to factor in your day-to-day expenses, like housing costs, food and health care. Remember, some of the costly expenses you have now, such as a mortgage or childcare costs, will no longer exist, which could result in a decrease in your overall expenses as you near retirement.

Next, add up all the income you might receive in your post-working years. Factor in pension income if you have one, social security payments and any other dollars, such as rental income from a property, that may come your way. Match up revenue and expenses and you’ll get a good idea of what you’ll need to set aside for every year of your retirement.

Read Also: How Does 401k Retirement Plan Work

Heres How Old School Investing May Just Protect Your Retirement

In the late 90s, the metaphorical Mrs. Watanabe invested in high-risk, high-interest bonds, issued in Japan in yen by foreigners, so-called samurai bonds. These bond issuers were not interested in raising money in yen, specifically, but instead issued them in Japan because Japanese investors are willing to accept much lower yields than are their foreign counterparts.

In the early 2000s, as bond rates continued to decline, scores of Japanese women shifted to currency trading, and earned a cult status across the world, so much so that the Bank of Japan credited the trading activity by housewives stabiliz currency markets as they bought on dips and sold into rallies. As reported in 2019, Individuals generally make one transaction per day, using margin accounts to leverage modest deposits of about 100,000 yen into wagers worth 10 times that amount, said Takuya Kanda, general manager of the Gaitame.Com Research Institute, part of the country’s leading internet platform for retail investors. Later, according to Reuters, traders in Japan as well as South Korean retirees turned to bitcoin with those same hopes of overcoming low interest rates from traditional investments.

Japanese household investments have propelled at least two peaks in the yen carry trade borrowing at low rates to invest in higher-yielding currencies or assets overseas. This has taken Mrs Watanabe into the currencies of Brazil and Turkey and later to Australia.

Plan For The Surprises

What Does Retirement Look Like to You?

Learning from the experience of others is smart for any situation, but especially for the important things you can learn from current retirees. How can you surprise-proof your retirement? Check your expectations and create a plan that covers all aspects of what life will be likeemotionally, physically and financially. And if you need help with the financial part, our consultants are here for you.

Also Check: Can I Use Retirement Money To Buy A House

Save Invest And Save Some More

Most experts say at least 10% of your income should go toward retirement. If youve started saving later in life, you may need to bump that up.1

Not possible right now? Thats OK. Save what you can and commit to increasing 1% every year until you can hit the mark. Try to save enough to get your employers matching contribution so you dont leave money on the table.

Options for saving and investing can include:

  • Company sponsored retirement plans like a 401, 403, or a Thrift Savings Plan for government employees
  • A variety of investments like mutual funds, stocks, bonds
  • Life insurance that builds cash value

The sooner you start, the more potential your money has to grow over time. Its all about compound earningswhen your money earns more money.

Lets say you invest $10,000. And you earn 5% over a year.

So now you have $10,500. Over the coming year, you make 5% not just on your initial $10,000 but also on the $500 you earned last year. Thats the benefit of compounding in action.2

Read When to start investing: 4 signs you’re ready to learn more about the power of compound earnings.

To learn how 401s, traditional and Roth IRAs, and Roth 401s compare, read about retirement savings account options.

Hsas And Financial Tools For Health Care

Everyone knows health care costs rise with age.

If you can start preparing for these expenses now, youll thank yourself later.


If youre still working and your employer offers a health savings account , consider enrolling and contributing to it.

An HSA allows you to store up money pre-taxed and possibly collect employer contributions.

If you spend HSA funds on qualified medical expenses which youre likely to have more of in retirement youll never pay tax on those costs.

One strategy experts recommend is opening an HSA now and funding it with extra income while continuing to pay for your current medical expenses out-of-pocket.

This way, you can save the money in your HSA for when you need it later in retirement and dont have as much income to cover health care.

You can think of an HSA as a special retirement savings plan a 401 for your health.

HSAs can also serve as a bridge to Medicare if youre forced to retire before age 65 due to health issues.

You can use HSA funds for any reason once you turn 65. At that age, you wont face a penalty for spending money on nonmedical expenses.

And like retirement accounts, you can also invest your HSA savings in mutual funds, stocks and other securities. This way your money grows over time. Your HSA provider can give you a list of available funds and securities to choose from.

Paying for Long-Term Care

2 Alternatives to Traditional Long-Term Care Insurance

Read Also: What Do People Do After Retirement

Financial Security During Retirement

Your age when you start saving and the amount you save every year have the greatest influence on how much income you will have during retirement. If you start saving for retirement when you’re young, even if it’s a small amount, you’re more likely to develop a lifelong habit and enjoy a more secure financial future.

Use the calculator below to envision scenarios specific to your situation.

How To Maintain Your Retirement Lifestyle

What A Near Retirement Portfolio Should Look Like

If you arent familiar with fixed index annuities, an FIA is designed to meet long-term needs for retirement income. Some of the benefits include:

  • Protection from stock market losses.
  • Defer taxes to grow savings faster.
  • The potential to earn interest based on positive changes in an external stock market index.
  • A death benefit to help her leave a legacy.
  • A guaranteed income for life.

Now, compared to an approach that uses a retirement account only, an FIA may offer less control, liquidity, and flexibility of assets for a period of time. FIAs have a surrender charge and a if surrendered too early.

Also, this may have less growth potential than a sole retirement plan has. Certain factors like caps spreads, and participation rates will limit the amount of indexed interest credited.

Regardless, annuities can help you grow your assets. Still, even better, an annuity can provide you with income thats guaranteed to last as long as you live, no matter what the interest rate is or what the market does.

Read Also: National Association Of Retired Persons

An Active Social Network

As you get older, your social support network becomes increasingly important. You draw your social support network from a much broader social network. Successful retirees generally have robust social networks that provide them with friendship, fulfilling activities and life structure. As part of your retirement plan, you might want to think about the quality of the social network that you have today and your plans to build it. One of the lessons that we can learn about the aging process is that our social networks begin to shrinkif we arent continually adding to them. You can join clubs, meet new people and get out of the house to do new things. In retirement you are going to want a lot of people who you can count on and it makes good sense to continue to seek out new opportunities to socialize.

Two Work Out Your Likely Retirement Income

Its now time to work out how much youre likely to have in retirement. Its a good idea to do this about two years before you retire.

This involves the following:

  • Getting a State Pension statement. If you havent recently had a State Pension statement, its a good idea to get one. This will give you an estimate of how much State Pension you might get. This is based on your National Insurance contributions so far. You can check your forecast on the GOV.UK website
  • Finding out how much you might get from any defined benefit pension . Ask your pension provider for a retirement quote.
  • Finding out how much you have in your defined contribution pension pot. You should be sent a statement annually showing how much is in your pot. Ask your provider for information on your retirement options.
  • Adding up the savings and investments you could use for your retirement. A pension is a good way to save for your retirement. But you might also have other savings or investments you could use to boost your income when you retire.
  • Tracing any lost pensions. If youve lost track of any old pensions, the government run a free service to trace them. Find out more on the Pension Tracing Service website
  • Also Check: Volunteer Opportunities For Retirees Abroad

    State And Federal Assistance Programs

    Social Security and Medicare arent the only safety nets available to older America. Other government programs can help fill the gaps.

    Most well-known programs for people with low incomes are administered at the state level.

    Where you live is going to be a really big component in how much assistance is available to you, Red said. Your benefits are almost double in Oregon than they would be in Montana, for example.

    State and Federal Assistance Programs

    What Does Retirement Look Like To You

    What Does Your Ideal Retirement Lifestyle Look Like?

    7 Min Read | Sep 27, 2021

    Kentucky natives Jon and Dorothy were six figures in debt and hadnt saved one red cent for retirement when they heard about a new class available at their church, Asbury United Methodist in Madison, Ala.

    The class was Financial Peace University.

    We went through FPU and realized why we were living paycheck to paycheck, Dorothy said. I remember the first class, and the people in the video gave testimony of paying off $5,000 and saving $3,000. I just couldnt believe they could really do that. I was a little leery that this would work, but we went to all the classes and immediately started living on a budget. We were all in.

    The first time Jon and Dorothy sat down and added up all their debt, they were shocked.

    We were both just sick, Dorothy said. We realized that we needed to wake up and take care of the debt.

    Also Check: New York Life Retirement Plan

    Retirement Plans For Self

    If youre self-employed or own a small business, you have some further options for creating your own retirement plan. Three of the most popular options are a solo 401, a SIMPLE IRA and a SEP IRA, and these offer a number of benefits to participants:

    • Higher contribution limits: Plans such as the solo 401 and SEP IRA give participants much higher contribution limits than a typical 401 plan.
    • The ability to profit share: These plans may allow you to contribute to the employee limit and then add in an extra helping of profits as an employer contribution.
    • Less regulation: These retirement plans typically reduce the amount of regulation required versus a standard plan, meaning its easier to administer them.
    • Investible in higher-return assets: These plans can be invested in higher-return assets such as stocks or stock funds.
    • Varied investment options: Unlike a typical company administered retirement plan, these plans may allow you to invest in a wider array of assets.

    So those are some of the key benefits of retirement plans for the self-employed or small business owners.

    What Is Retirement Like

    Being on the cusp of retirement can be a scary feeling. After years of working hard and making a living, you finally have the chance to slow down and enjoy your golden yearsbut at the back of your mind, youre probably asking, What is retirement really like?

    When we envision retirement, we often think of endless rounds of golf, long walks in warm weather, and hours of free time. All these activities are great advantages of retirement, but they dont make up everything. Ultimately, you wont know what retirement is like until it happensbut here are a few details that might help you feel more prepared:

    You May Like: Sign Up For Ssi Retirement

    Adjust To Turning Your Perspective Upside Down

    Retirement is a big deal. Both your lifestyle and your finances do an almost 180 when you retire. Your time is suddenly spent in leisure not work and you go from earning money to spending. It can be challenging to go from a focus on accumulation to spending .

    Explore 6 tips to flip your mindset from saving to efficient spending. Or, if you are worried about retirement, try changing your perspective!

    A Clear Vision Of The Kind Of Life That You Want

    What does retirement look like these days?

    When you think of the word retirement, what vision comes to mind? Is retirement a work issue for you, or maybe a financial and investment plan? Far too many pre retirees make the mistake of thinking that the financial plan and the retirement plan are the same thingthat the life part will take care of itself. This stage of your life deserves a more holistic look and plan than simply assuming that you are beginning a thirty-year long weekend. What do you want your life to look like? What changes do you anticipate along the way? How will you get the most out of each and every day? Those are important questions as you contemplate your move into this next phase of your life.

    Read Also: Former Spouse Military Retirement Pay Taxes

    Are You A Family Caregiver Be Careful To Keep Your Own Retirement On Track

    The costs of being a caregiver can be overwhelming. There is the extreme emotional turmoil but there are also serious financial concerns from money spent out of pocket and from time spent caregiving instead of earning income.

    While you may only be able to think about how to help the person you are caring for, there are steps you can take to protect your own retirement. You deserve the time it takes to care for your own self, too. Explore 5 tips for taking care of yourself.

    Retirement Accounts For Small

    According a 2020 Bureau of Labor Statistics report, 33% of workers don’t have access to a workplace retirement plan. At companies with fewer than 100 workers, roughly half of employees are offered a retirement savings plan.

    If you work at or run a small company or are self-employed, you might have a different set of retirement plans at your disposal. Some are IRA-based, while others are essentially single-serving-sized 401 plans. And then there are profit-sharing plans, which are a type of defined contribution plan.

    Main advantages of plans for the self-employed:

    • Plans for contractors, the self-employed and small-business owners have higher contribution limits than most employer plans and IRAs.

    • These plans often offer more investment choices than employer-sponsored plans, such as 401s.

    • Many of these plans are easy to set up and therefore not much of a burden on the employer that’s you, if you’re a small-business owner.

    • You might be able to set up your account at a financial institution you already use.

    • If you’re self-employed, you can give yourself a generous profit-sharing contribution, plus make your elective deferral with catchup as the employee.

    Main disadvantages of plans for the self-employed:

    Also Check: Comptia Network+ N10 007 Retirement

    Youre Our First Priorityevery Time

    NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.

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