Today’s Wisdom:
Every generation faces different financial challenges than their predecessors, and people heading into retirement right now are no different. Let’s look at the areas of planning that are more difficult now than they used to be and discuss adjustments that people are having to make.
Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.
What You’ll Learn:
The first thing to understand about financial planning is that it’s an ever-evolving process. That’s true in the industry and at an individual level. As advisors, we are constantly addressing new challenges and working on solutions that fit the needs of each client.
What we’re currently seeing is the challenges facing retirees and pre-retirees are much different than what their parents were faced with. On this episode of the Money Wisdom podcast, we want to identify some of these areas and help you understand what people are doing to adapt to these changes. By bringing them to your attention, hopefully, it gets you thinking about these planning items and eventually discussing them with an advisor.
Maybe the most significant difference today is the lack of a pension. This retirement income source is becoming less and less common and appears to be phasing out of the corporate benefit plan altogether. That’s tough because pensions have been a significant portion of retirement income and now people are having to figure out how to replace it.
We used to have this three-legged stool for retirement – Social Security, pension, and personal savings. Each of those legs combines to provide the income you need so losing one of those puts much more pressure on the other two. That’s made savings and investing a crucial part of the planning process. Annuities are one option to replace that recurring income and something that Joel’s father prefers to use, but that might not be a solution for everyone.
Another challenge facing retirees – and it’s a positive one – is that people are living longer and longer. That’s a great thing but it also means we need money to last longer than it used to. Building an income plan and understanding your expenses is more important than ever and why it benefits you so much to build a comprehensive plan. Living a longer life means more potential events that could impact retirement.
Speaking of saving for retirement, the option to park money in a savings account and generate decent interest is a thing of the past. Interest rates are almost non-existent for many accounts and you have to find other avenues for generating returns. That could change in the future, but the low rates are penalizing savers in our current environment. The good news is there are investments that don’t carry a lot of risks but can still outpace inflation.
Planning can take care of much of the worry that comes along with overcoming these challenges and that’s why we offer the complimentary Money Map review for clients.
Let’s get started with the show. You can listen to it by using the audio player above and click on the timestamps to skip to a specific topic of conversation.
[0:44] – Pensions becoming rarer
[3:11] – Life expectancy is longer
[4:18] – Interest rates are much lower
[5:41] – Volatility seems more pronounced
[7:42] – Money Map review
[9:08] – Making the process easy
Thanks for listening to this episode. We’ll be back again next week for another show.
Final Thoughts:
“We need to be ever more diligent with that personal savings and investment piece, which is why most wealthy people use financial advisors.”
– Joel Johnson
3 Related Items & Resources:
• Understanding Risk in Your Portfolio
• Mailbag – RMDs, Company Stock, and Robo-Advisors
• A Tax-Free Roth IRA Can Help You Keep More of Your Retirement Income

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Thank you for listening!