Top 5 Retirement Factors

Top 5 Retirement Factors which will guarantee a successful retirement. When you crush these 5 factors you will be able to sleep well at night knowing you will have a successful retirement.

Inflation

Inflation has been referred to as the “silent killer’ of a portfolio’s value. It slowly and silently eats away at your purchasing power until one day you realize that your income is no longer covering your needs. You beat inflation by earning more then inflation. For most of our lives inflation has been mild 2-3% per year. However, in 2021 inflation went as high as 7%. That is a significant impact. If you are retired and on a fixed budget high inflation is one of the top 5 retirement factors which can destroy your retirement plan.

Cost of Living

If you were to retire today what would your retirement look like? Would you live on the beach in Miami. Do you plan to live in your 3 bedroom home in upstate NY? Determining where you plan to spend the majority of your time in retirement is one of the top 5 retirement factors you must consider and plan for many years in advance.

If you plan to live in the South of France your financial needs will be very different then if you were to live in South Carolina. Cost of living varies by location and by season. Inflation another of the top 5 retirement factors should be top of mind if you live in an up and coming location filled with restaurants and trendy shops.

Health Care Expenses

Collectively we are living longer. However, to live longer we need to visit doctors and take certain medications. Health care expenses are top 5 retirement factors you must plan for or they can destroy your entire retirement budget. Health care expenses are hard to forecast. However, you must plan for some elevated health care expenses as you age. Some ways to potentially reduce cost is to purchase or add riders to some of your eligible insurance policies. The best type of coverage would include some form of long term care insurance. Long term care is one of the biggest expenses during retirement years.

Social Security

When to turn on the faucet and when to wait? Did I work enough weeks and will my social security benefit be enough? Social security amounts and when you decide to start taking them are extremely important. Social Security was established as a social insurance program. Benefits are earned by contributing to the system during the course of one’s employment through a payroll tax, or FICA (Federal Insurance Contributions Act).

Social Security was never designed as a salary continuation program or to replace a person’s full preretirement income. Instead, it is meant to provide a foundation, or income floor, to prevent poverty during one’s retirement years.

Lifestyle

Everyday is Saturday in retirement people tend to assume that their expenses will drop dramatically in retirement. Some expenses may drop, but other costs are likely to increase. Think about it. When do you spend the most money? Probably on Saturday, right? And once you retire, every day is a Saturday.

Travel, golf, hobbies, dining out, and don’t forget about increasing medical expenses as you age – these things will add more quickly than most people realize, making postretirement income needs just about equal to his or her needs prior to retirement.