Ready to Retire Scenario
Traits of the investor who is a few years away from retirement or ready to retire:
- 60 years old or older
- Full retirement age: 67.
- Live to age 90.
- Will draw on social security (may or may not depend on it)
Hopefully the investor who is nearing their retirement age is wanting to retire, not because they have to retire. As we age medical issues may play a part in what age a person decides to retire. How many times have you seen seniors at age 70 working to make ends meet? People nearing retirement have the following needs:
- Supplemental health insurance in addition to the medicare they’ll have when they retire
- A strategy for long-term care, which can devastate a retirement portfolio
- Travel expenses, while they’re able to travel
- Grandchildren expenses
- A great need for cash reserve (at least a year’s worth of expenses in cash)
- “Consistent” income1
One of the most important questions for the retiree is “Will my money last as long as I do?” With proper financial planning the likelihood of it lasting until they pass is much higher. This is where proper money management and diversification can help, wherein:
- Accounts that give them a “consistent” cash flow
- Accounts that are for emergencies or for a period of time the stock market is negative
- Accounts that allow their assets to grow to keep up with inflation
- Source of money for long-term care expenses
