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5 More Rules for Your Retirement

Last month’s focus was on the first five of 10 rules for achieving a comfortable retirement lifestyle. The recommendations included shifting into your projected retirement lifestyle a few years before retirement to get used to living on a different budget and down-sizing your behavior to make the eventual shift more familiar; developing new sources of income to compensate for Social Security’s inability to provide all your financial needs; developing an estate plan to care for your loved ones in case of your demise or disability; considering relocation to warmer climes or to be more proximate with your family; and being mindful of communications from the entities managing your wealth.

Here are the second five suggestions for achieving an anxiety-free retirement lifestyle which we hope will stir your interest and inspire you to take the necessary steps for the best wealth management for your circumstances.

Rule #6: Make funding your retirement goals your first priority. Your retirement years could be as many as 25…30…even 35 years. With medical improvements occurring yearly, it’s possible that many Americans will live into the first decade of their 100s. This should be a blessing, not a curse! If you and your spouse or partner will be living longer, you’ll need more financial resources to live independently and not under the authority of the government or through the generosity of your family. Currently life expectations are around 90 years; 10 extra years are likely to be costly, especially with inflation 25 – 35 years from now. This is why you should make funding your retirement your single most important priority, not an expensive vacation or a second home, unless it’s a good investment and treated as such.

Rule #7: Increase your savings regimen. For now, save and invest as much as possible while your ally, time, is still on your side. With sufficient time, you and your financial advisor can increase your wealth sufficiently to meet your projected needs two or three decades from now. Saving as much as you can now is the wise choice. If you find you’ve been over-saving in years to come, you can always lay off the throttle, but until your financial future is more clearly defined, save now so you won’t be throttled later by insincere planning. Use the gift of time and the wisdom espoused by every financial planner!

Rule #8: Prepare your wealth building for increased tax responsibilities. Indications are that we may now be at the low point for taxation. Given the federal economy and the state of the global financial situation, taxes may soon begin increasing to pay for the magnified liabilities of Social Security and government pension plans. With so much of our government’s resources being applied to debt service, additional taxes may be the necessary solution to maintaining our nation’s stability. Investment in tax-advantaged vehicles, like Roth IRAs for example, could be a good strategy.

Rule #9: Be sure to budget for health care. Because of the improvements in medical care, you’ll need to plan for healthcare expenses as you grow older. Counting on Medicare and supplemental insurance may be helpful, but they may not be sufficient. Remember that these forms of insurance will be costing you and your spouse or partner monthly premiums, and the costs are likely to grow each year. Another big expense could be the cost of prescription drugs which can often be expensive. Long-term care insurance could be one answer, but you should definitely consider a variety of ways to provide for your health care during retirement. Your financial advisor can assist you with understanding your options.

Rule #10: Invest your funds so you’ll be rewarded with a steady income stream when you’re retired. Most people think they must save their money so when the retirement years arrive, they can then spend down their savings. It’s a much better plan to maintain and safeguard the amount of money you’ve set aside over your four decades of work by using those funds to generate continuing income streams. Something you might want to talk to your financial planner about is owning property that provides rental income, or diversifying your portfolio so you receive a steady flow of dividends. It’s very important to remember that your financial advisor can be a great resource with helping you work through the obstacles that arise as you begin to plan and take action for the retirement life of your dreams.

Financial planning should be #1 on your To Do List. We invite you to make a consultative appointment with us today so we can discuss ways to set your path to retirement success. Thank you!


Synergy Financial Management, LLC

701 Fifth Avenue Suite 3520

Seattle, Washington 98104

ph: 206.386.5455

fx: 206.386-5452