6 Retirement Money Hurdles

June 01, 2017

What are your biggest concerns about money and retirement?

While it’s nice to read articles that emphasize the positive, it’s often the mistakes we avoid that make the difference between success and failure.

With that mind, here are 6 retirement money hurdles you need to master for a solid financial future.

1) How Will You Pay Your Bills?

If you answered, “I’ll pay my expenses with my retirement savings,” you might need to reconsider.

Many people have been told that a good retirement income rule is to set a goal to earn (between returns on investments, Social Security, etc.) the equivalent of 70 to 80 percent of what you earned before you stopped working.

True, that might be okay for a while. However, most retirees find that 70 or 80 percent doesn’t provide enough cushion for health emergencies, which are the #1 threat to your retirement budget.

But health expenses aren’t the only concern. What about investing in new hobbies, travel, family, kids in need, home repairs and your grandchildren’s education?

Beware, because what seems like enough on paper, may not be enough when it comes to actually meeting your monthly expenses.

2) How Secure is Your Job?

You’re preparing for your transition to retirement, which is a good thing. But are you overlooking an unexpected forced retirement?

More than half of us are forced to retire earlier than we planned.^[1]Beyond layoffs and firings, many people have to retire due to personal health issues or the health of a loved one.

3) Social Security Rule Changes

At least Social Security is stable. Well, maybe not. Think back a year.

Millions of married people who were planning to retire in 2016 found themselves with one less income earning strategy.

In November 2015, Congress announced a sudden end to the “file and suspend” option, which allowed the higher-earning spouse to file for Social Security benefits, then suspend them, only to reclaim them at a later date (and at a higher rate).

File and suspend enabled the lesser-earning spouse to start earning monthly benefits equaling half of the higher-earner’s full Social Security benefits right away.

This strategy sometimes resulted in upwards of $130,000 of extra income over a 25-year retirement.

But that’s all over.

What will the changes be over the next 10, 20, 30 years? The bottom line is, what we expect from Social Security today is likely to change in our lifetime.

For more information about the ins and outs of Social Security, download our free 10 Social Security Facts Guide.

4) Investment Diversification

If you have not diversified beyond your 401k or IRA, take a close look at today’s balance and circle it. Ask yourself, “Can I stretch this out for the rest of my life?”

If you don’t diversify, that’s the scary reality you’ll face when you retire.

Even if the answer is, “Yes, and several generations beyond,” then the question is, why haven’t you diversified? We live in an ever-changing world, and in order to withstand global shifts in the markets, it’s imperative that you build a diversified portfolio.

5) Managing Risk

You may be like a lot of Baby Boomers who have worked hard, saved well, and invested wisely for the future. And now that retirement is within view, you might be thinking you can let up a little and start to cruise.

Let me assure you that now is not the time to lose focus.

The reality is, the majority of us get caught shorthanded when it comes to crunching the numbers we think we need compared to what we are actually going to need.

Unfortunately, I see more folks who continue to run up against unexpected expenses, whether it’s health emergencies, home repair, or just the cost of day-to-day living edging up. And before they know it, what was once a secure retirement nest egg is now diminished.

One of the most worrisome retirement facts is this: A whopping 60 percent of retirees run out of money a full 9 years before the end of their lives.^[2]

6) The Best Plan to Secure Your Future

Even if you’ve amassed a formidable savings account, such as a few million dollars, and think you’ll be fine, while that was once true, it’s often not the case any longer. There is no such thing as a completely secure future. You have to plan to make your assets last.

While almost no amount of savings ensures that you’ll always be flush, thorough planning can go a long way toward making your actual future match up with the future you’ve always envisioned. To get help creating a plan that can provide a more secure future for you and your loved ones, talk to an advisor today.

[1] April 2015 AARP

[2] December 2014 AARP

Advisory services offered through Allworth Financial, a Registered Investment Advisor | Disclosures | Privacy Policy

Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.

HMRN Insurance Agency, LLC license #0D34087

¹Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

² Retention Rate Source: Allworth Internal Data, FY 2022

³ The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.

⁴ As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration.

⁵ InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience.

⁶ 2021 Value of an Advisor Study / Russel Investments

⁷ Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

⁸USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

⁹NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

^✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

^✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

^†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.