4 Factors That Can Affect Your Retirement

Retirement Income

4 Factors That Can Affect Your Retirement

Posted by Asset Protection Group
4 years ago | June 20, 2018

Once you retire, you will be living on a combination of income-generating vehicles that you established throughout your career. For example, you might receive income from Social Security, retirement plan distributions, an annuity, or other investments. In many cases that can mean that your annual income is relatively fixed. Hopefully, it will be stable enough that you don’t have to worry, but stay focused on these four factors that can impact your income or purchasing power.

Inflation. Prices of goods and services rise so slowly in many years, that we scarcely notice it happening. However, even during a long stretch of relatively slow inflation, prices can double over a 20-year period! With the average retiree living longer these days, there is a chance that your retirement income won’t stretch nearly as far toward the end of your retirement. We can help you explore ways to accommodate inflation within your overall retirement income plan.

Individual risks. A change in your health status – for example, the need for long-term nursing care – could drastically impact your budget. If you’re heavily invested in something like real estate, keep in mind that markets can change dramatically over a short time period. Or, perhaps you’ve focused on the equity in your home, only to experience some poor luck in selling it when you wanted. Depending upon your individual circumstances and how you have structured your financial plans, you could be subject to some unique risks. That’s why it’s so important to meet with us regularly, to review and update your strategy.

Fluctuating interest rates. When interest rates are low, bond investors are usually happy. However, as with the stock market, interest rates can fluctuate and impact bond values. Rates almost always change slowly, so just keep an eye on them and be ready to respond if an unfavorable trend seems to be emerging.

Rocky stock markets. Obviously, we always hope for favorable stock market conditions. But during some periods the outlook can be uncertain. If you’re heavily invested in the stock market as your target retirement date grows closer, you might want to think about re-balancing your portfolio with a mix of more stable assets. But since this is a highly individual decision, don’t make a decision without consulting with us first. Give us a call, and we’ll help you decide if more stable and predictable assets might be safer as you transition into retirement.

 

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