Is Running Out of Money During Retirement a Fate Worse Than Death?
When you are young, everyone wishes you a long life, as though simply making it to an advanced age is a win. Once you are on the other side of 50, though, the realities of old age set in. How much longer will your old bones be able to get through a day’s work, and when they no longer can, how will you pay for your bread and butter? The possibility of spending the rest of your life lonely and food insecure is terrifying, and while it is only the worst-case scenario, most seniors live an unglamorous retirement. Financial planners wear a serious expression when they talk about what it is like to outlive your retirement savings; it is enough to make you take up unhealthy habits just so your life force can run out before your retirement savings do. Even if you do not have a lot of money saved for retirement or a lot of time to build up your retirement account balance before you retire, there are still financial safeguards to protect you from being destitute in your old age. For help making the most of your modest financial security in retirement, contact a Bronx estate planning lawyer.
The Four Percent Rule Is How the Other Half Lives
There has been robust debate in the media about whether the four percent rule is obsolete. For decades, financial planners would tell seniors that they could have an economically sustainable retirement if they withdrew four percent of their retirement savings each year. This was based on the expectation that they would survive for 25 years past retirement. Recently, financial planners have questioned this conventional wisdom. People live longer than they used to, so doesn’t it make more sense to withdraw only three percent of your savings each year? Furthermore, your expenses are not the same each year. You spend more money on fun adventures at the beginning of your retirement and more money on medical expenses toward the end.
This advice only makes sense if you have a retirement account. Not everyone does, and of those that do, some only have enough to pay for a few senior breakfasts per year if they withdraw four percent per year. Your reality means living on your Social Security check, which is why you plan to work for as long as your body will hold up.
Actions You Take Now Can Protect You From Financial Catastrophe in the Future
The best investment you can make in your 50s is to buy long-term care insurance. This will prevent you from having to enter a nursing home as a Medicaid beneficiary, which would require you to hand your Social Security check over to Medicaid.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you plan for a modest retirement where your best protection against poverty is long-term care insurance or hybrid life insurance. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
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