Retirement Uncertainties

Welcome to the Money Wisdom Podcast where Joel Johnson, CFP® of Johnson Brunetti, reviews retirement and investment topics weekly. Let’s get started…

Today’s Wisdom:

Retirement planning contains many uncertainties. While these variables are tricky to navigate, you should be able to identify them and plan accordingly.

What You’ll Learn:

[2:09] – Knowing The Unknowns.

  • Your retirement will be filled with uncertainties. Luckily, we do know this with certainty, so there’s still time to plan accordingly.

2:5 – How To Approach Longevity.  

  • None of us know how long we’re going to live. However, we do know we’re living longer, so we need to plan to live longer. This means we need to make sure we’ll have enough income to keep up with inflation and last us until our last day on this earth.

[5:25]  – What Do We Do With Uncertainties Surrounding Interest Rates?

  • We also don’t know what interest rates will do in the future. However, changing interest rates can greatly affect your portfolio. This means we need to make sure some of your money is safe. You can’t put all of your money at risk, but some of your money does need to be in the market to protect against inflation. Joel explains your options for protecting your wealth.

[9:02] – What Will Tax Rates Do In The Future?

  • Nobody knows how much tax rates will increase in the future. However, we do know we’re in a period of historically high debt and historically low tax rates. Something will have to give in the future whether that includes reducing government benefits, raising taxes, or devaluing the dollar. Make no mistake, all of these options will hurt you as an investor. If tax rates do increase, you’ll need to have a tax strategy in place to alleviate your tax burden.

[13:45] – How Do We Take The Uncertainty Out Of The Future.

  • A comprehensive financial plan removes some of the uncertainty from your future. Its goal is to protect your wealth regardless of what happens to you or Wall Street.

[15:41] – Shifting The Conversation.

  • Joel begins a conversation on the irreversible decisions in your retirement plan.

[16:13] – Irreversible Decisions – Social Security.

  • You’ll have to elect when to withdraw your Social Security benefit, and once you decide when to withdraw, you won’t get a do-over on that decision. It’s important to work your Social Security strategy into your retirement plan.

[19:29] – Irreversible Decisions – Whether To Purchase Life Insurance.

  • Okay, technically this one isn’t irreversible. However, it’s easy to put off purchasing life insurance, and the longer you wait, the longer it is to purchase. The time to determine whether you want or need life insurance is now.

[20:49] – Irreversible Decisions – Choosing A Retirement Date.

  • Okay, technically this one isn’t irreversible either. However, once you pick a retirement date, it’s hard to go back on that. Furthermore, once you retire, it’s tough to re-enter the workforce. You need a retirement plan in place before you start what we like to call “permanent unemployment.” Sit down with an advisor, and consider making a pre-retirement checklist of what needs to happen before you can retire.

Final Thoughts:

“While life is filled with uncertainty, it’s important to know what you don’t know and plan accordingly. ”  – Money Wisdom

Additional Resources:

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Thank you for listening!