In an age of endless advice, experts and how-to’s, it can be very easy to lose sight of the foundations of retirement savings. We stumbled across this blog and thought it would be of great interest to our readers.
Since the most recent market meltdown, Americans are re-evaluating their financial situations.
Some, mostly those who have invested some time and money in the process of “planning,” are doing so with at least a clue of what their target is or should be.
Those who have not planned are likely more fearful of the uncertainty of the future, fueled additionally by the fact that they have no clue of what they may be aiming at.
For most, retirement is a goal.
It is either something they are striving for, or, if they are already in retirement the goal is to exist in it successfully.
By simple definition, don’t run out of money before you run out of time.
With all the fancy products, schemes, hedge funds and the like that have populated the investment world for the past 20 years, Americans have lost their taste for the risk that was imbedded within them.
We’re going back to basics.
We are looking for things that can make a solid foundation for what is likely to be a somewhat “scaled-down” retirement lifestyle.
Guarantees and insured accounts have pushed their way to the forefront of American thinking.
No longer do we hear Suze Orman “pooh-poohing” variable annuities or Guaranteed Insurance Contracts (GIC’s) because of their fee structure or complexity.
In the three market recessions that have come along since 1990, these basic building blocks of financial security have been among the few things that protected investors from serious economic loss.
People are restoring their priorities as well.
They are looking more to protecting their income sources, managing risk and building cash reserves before going out looking for that hot investment opportunity.
Getting out of debt has become more popular than ever, especially since the big banks have nearly all raised their fees and credit card interest rates.
Once these bottom tiers of the financial security “pyramid” have been properly constructed, we can turn to the task of trying to make our money grow to outpace inflation.
Retirement is likely not going to be the luxury car or the annual trip to Europe as many may have hoped.
We are becoming more focused on a reasonable and perhaps even frugal lifestyle that will give us a better chance of being able to afford to live another day with the freedom to make our own choices. People are living longer and are doing so under greater economic duress than ever in recent memory.
The greatest threat to our financial freedom is our own longevity.
With retirements now projected to last 30 years or more, do we have 30 years of income put away in a source that is guaranteed?
Since tomorrow is the first day of the rest of our life, what are we waiting for?
Al Benelli is a Certified Financial Planner™ and founder of The Merlin Group. Securities and investment advice offered through Capital Financial Services Inc., member FINRA/SIPC, 2605 Egypt Road, Trooper; 610-676-0668.
