Danny J. Young of Adel, GA has served in the financial services industry for over 40 years. As president and CEO of Independent Retirement Professionals, Mr. Young has trained and mentored countless industry professionals since the firm’s inception in 1991. In the following article, Danny J. Young discusses how retirees are facing financial risks, but hope is not lost with effective planning.
Unfortunately, those considering retirement (or who are already in their golden years) can’t simply indulge in the luxuries of life without work commitments. There’s much planning and saving required. Not to mention the huge risks to contend with in today’s tumultuous economic landscape.
Danny J. Young of Adel, GA says that people are living longer, pension plans are rapidly becoming null and void, and the global economy is in tatters. All of these risks (and more) are behind the United States of America’s retirees’ woes. Retirement planning has always been tricky, but the added risks of today’s society have made it significantly harder.
But while it may seem like everything is doom and gloom, there are steps potential and current retirees can take to mitigate the risks and work toward a healthy, happy retirement period.
Outliving Money Poses a Huge Threat
According to Danny J. Young of Adel, GA, research from the Boston College’s Center for Retirement Research, found that the largest threat facing retirees is outliving their money.
Naturally, it’s fantastic news that Americans are living longer than ever before. But the extra years come with extra costs.
Danny J. Young of Adel, GA says that it appears many about-to-be retirees underestimate how long they will live, thus undercutting how much money they’ll need to sustain themselves. This alone affects the entire planning portion (i.e., the most critical part) of retirement.
To combat this, experts suggest delaying Social Security benefits until individuals reach 70 years old. Suze Orman, an esteemed financial advisor and author, stated that doing so is the best investment people can make for their golden years.
Panic Over Affording Medical Costs
Danny J. Young says that retirees often miscalculate medical costs, posing a huge financial risk to retirement slush funds.
Research performed by Fidelity Investments showed that the average couple aged 65 years should expect to spend $315,000 on healthcare alone throughout retirement.
In 2021, the number was $300,000, and the company’s research concludes that medical expenses have doubled since the same time 20 years ago.
Savvy wannabe retirees often purchase long-term care insurance during their 50s to alleviate medical costs throughout their later years. Health savings accounts are also a good idea due to the tax perks offered.
Stock Market Volatility Comes in as The Third Largest Risk to Retirees
Market see-saws stress all investors out, including people reaching retirement. Danny J. Young reports that the current climate and volatility truly haven’t helped matters.
June saw the stocks enter a bear market, further increasing fears and prompting financial experts to suggest delaying retirement for another year or two.
If that isn’t possible, Danny J. Young of Adel, GA says that individuals should not throw in the towel by liquidating their investments. After all, the only thing worse than missing out on gains is concreting losses during volatile market times.
Regardless, those approaching retirement age should look to change their investment allocations. That way, stock exposure is limited, and older adults aren’t so subjected to ever-present market swings.
Ever-Changing Social Security Policies Cause Stress
Social Security is the biggest federal program in the country, providing a whopping $800 billion in retirement benefits in 2017.
However, the Administration forecasts that Disability Insurance and Old-Age and Survivors Insurance trust funds will disappear by 2032 and 2034. And once both are gone, 86 million beneficiaries will have to tackle a 21% cut in benefits explains Danny J. Young of Adel, GA.
More than half of Americans aged at least 65 depend on Social Security to cover a minimum of half their living costs, with most relying on the check to fund 90% of their expenses. Thus, depleting pots is wholly problematic.
Thankfully, the issue isn’t beyond repair. Between now and the forecasted depletion date, Congress could create change that keeps retirement benefits fully funded.
Emergency Events and Rising Family Expenses Put Retirees on Edge
Finally, Danny J. Young says that families will likely face unforeseen emergencies with related expenses requiring funding. From chronic illness to untimely deaths to divorces, life throws horrific curveballs that, unfortunately, don’t stop when retirees are falling behind on payments.
Such events are hard to plan for. But due diligence regarding life insurance, survivor benefits, and long-term care coverage could help cover the costs of unexpected circumstances.
Some older adults even decide to craft postnuptial agreements (i.e., a document created after marriage) to protect their finances if push comes to shove.
Danny Young is registered with and securities are offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 North Federal Hwy, Suite 1201, Ft. Lauderdale, FL 33308, (954) 782-4771 Investment Advisory services are offered through Kovack Advisors, Inc. Independent Retirement Professionals, Inc. is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc. The information in this material is not intended as tax or legal advice. Please consult legal or tax advisors for specific information regarding your individual situation.