Danny J. Young of Adel, GA, has worked in the financial services industry for over 40 years. As President and CEO of Independent Retirement Professionals, Mr. Young has trained and mentored countless industry professionals since the company was founded in 1991. In the following article, Danny J. Young explains how retirees face financial risks, but hope is not lost with planning.
Unfortunately, those contemplating retirement (or who are already in their prime) cannot simply indulge in the luxuries of life without work commitments. There is a lot of planning and saving involved. Not to mention the enormous risks that must be faced in today’s tumultuous economic landscape.
Danny J. Young of Adel, GA says people are living longer, pension plans are quickly becoming null and void, and the global economy is in tatters. All of these risks (and many more) are at the root of the woes of retirees in the United States of America. Planning for retirement has always been tricky, but the added risks of today’s society have made it much more difficult.
But while it may all seem pessimistic, there are potential steps that current retirees can take to mitigate risk and work toward a healthy and happy retirement period.
Surviving money poses a huge threat
According to Danny J. Young of Adel, GA, the search for the Boston College Center for Retirement Researchfound that the biggest threat to retirees is outliving their money.
Of course, it’s great news that Americans are living longer than ever. But the extra years come with extra costs.
Danny J. Young of Adel, GA says it seems many future retirees underestimate how long they will live, thereby reducing the amount of money they will need to support themselves. This alone affects the entire planning part (i.e. the most critical part) of retirement.
To combat this, experts suggest delaying Social Security benefits until individuals turn 70. Suze Ormanan esteemed financial advisor and author, says this is the best investment people can make for their golden years.
Panic over medical bills
Danny J. Young says retirees often miscalculate medical costs, posing a huge financial risk to pension slush funds.
Research by Fidelity Investments showed that the average 65-year-old couple should expect to spend $315,000 on health care throughout their retirement.
In 2021, the number was $300,000 and the company’s research concludes medical spending has doubled since the same time 20 years ago.
Savvy, budding retirees often purchase long-term care insurance during their 50s to reduce medical costs throughout their later years. Health savings accounts are also a good idea because of the tax advantages offered.
Stock market volatility is the third biggest risk for retirees
Market swings stress all investors, including those approaching retirement. Danny J. Young reports that the current climate and volatility really haven’t helped matters.
In June, stocks entered a bear market, further heightening fears and prompting financial experts to suggest delaying retirement for a year or two.
If that’s not possible, Danny J. Young of Adel, GA says individuals shouldn’t throw in the towel by liquidating their investments. After all, the only thing worse than missing out on gains is to lock in losses during periods of market volatility.
Either way, those approaching retirement age should look to modify their investment allowances. This way, equity exposure is limited and seniors are not as subject to the ubiquitous market fluctuations.
Ever-Changing Social Security Policies Cause Stress
Social Security is the nation’s largest federal program, providing $800 billion in retirement benefits in 2017.
However, the administration predicts that the trust funds for disability insurance and old age and survivors’ insurance will disappear by 2032 and 2034. And once the two are gone, 86 million beneficiaries will face a reduction of 21 % benefits, says Adel’s Danny J. Young. , GA.
More than half of Americans age 65 or older rely on Social Security to cover at least half of their living expenses, with most relying on the check to fund 90% of their expenses. Thus, the exhaustion of the pots is quite problematic.
Fortunately, the problem is not irreparable. By the scheduled exhaustion date, Congress could create a change that keeps retirement benefits fully funded.
Emergency events and rising family expenses put retirees on edge
Finally, Danny J. Young says families will likely face unforeseen emergencies with related expenses that require funding. From chronic illnesses to premature deaths to divorces, life throws horrific curve balls that, unfortunately, don’t stop when retirees fall behind in payments.
Such events are difficult to plan. But due diligence on life insurance, survivor benefits, and long-term care coverage could help cover the costs of unforeseen circumstances.
Some seniors even decide to write postnuptial agreements (i.e. a document created after marriage) to protect their finances in times of need.
Danny Young is registered with Kovack Securities, Inc., Member FINRA/SIPC, and the securities are being offered. 6451 North Federal Highway, Suite 1201, Ft. Lauderdale, FL 33308, (954) 782-4771 Investment advisory services are offered by Kovack Advisors, Inc. Independent Retirement Professionals, Inc. is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc. Information contained herein is not intended as tax or legal advice. Please consult legal or tax advisors for specific information regarding your personal circumstances.