One of the comments I continually hear from people heading toward retirement is the fear of "running out of money." In fact, it is the BIGGEST fear among those of use marching toward the date when we no longer have income coming in from a J-O-B.
Many folks I work with wonder if there will still be Social Security as we age into older years. No one know the answer to that but some of the stats are alarming.
Among elderly Social Security beneficiaries, 22 percent of married couples and about 47 percent of unmarried person rely on Social Security for 90 percent or more of their income. Ouch ! (May 12,2014)
The 109,631,000 living in households taking federal welfare benefits as of the end of 2012, according to the Census Bureau, equaled 35.4 percent OF ALL 309,467,000 people living in the United States at that time.
In an article published by the U.S. Census Bureau in May 2014 titled An Aging Nation: The Older Population in the U.S.: The projected growth of the older population in the United States will present challenges to policy makers and programs, such as Social Security and Medicare. It will also affect families, businesses, and health care providers
The population 85 years and over will double by 2036 and
then triple by 2049. The third perspective measures the size of the older
population relative to the working age population, defined as ages 18 to 64.
While currently there are 19 people aged 65 to 84 for every 100 working-age
people, this ratio will climb to over 30 by 2028. That is to say, there will be
approximately three working-age people to support each person aged 65 to 84.
So, why should you care about statistics? We used to plan for a 30 year retirement but now it is common to plan for a 40-year retirement scenario. Will your portfolio last that long? Have you allocated enough money to a "fixed-income" strategy so that you can weather the ups and downs of a volatile 30 or 40 stock market ride, bond rates hit with losses due to rising interest rates and projected health care costs?
The average lifetime retirement health care premium costs for a 65-year-old healthy couple retiring this year and covered by Medicare Parts B, D, and a supplemental insurance policy will be $266,589.
This does not include the cost of Long-Term-Care which is not covered by Medicare. 70% of married couples will need to spend another $250,000 or more for at least one spouse. Do you spend the savings and leave the surviving spouse broke? Losing one Social Security check is hard enough. Do you sell the family home, do a reverse mortgage, move in with your kids?
These are just some of the very important talking points when meeting with a prospective client. It's not so much about how much you have saved by the time you retire. It's more about how you PRESERVE those assets and make sure they work for you for another 30 or 40 years.
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