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Biggest threats to a comfortable retirement...

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Edward Jones - Chad Choate, AAMS

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Posted on

Jul 18, 2023

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Florida - Sarasota, Bradenton & Charlotte Counties

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If you save and invest

for decades, you’d like to know you can retire without financial worries.

Nonetheless, you still have to be aware of some threats to a comfortable

retirement — and how to respond to them.

These threats include:

• Inflation – Inflation has been

high recently, but even a mild inflation rate can seriously erode your

purchasing power. In fact, with just a 3% inflation rate, your expenses could double

in about 25 years — and your retirement could easily last that long. So, if you’re

going to rely on your investment portfolio for a sizable part of your

retirement income, you will need to own a reasonable number of growth-oriented

investments, such as stocks or stock-based funds, whose potential returns can equal

or exceed the inflation rate.

• Excessive withdrawals – Once you retire, you

should establish a withdrawal rate for your portfolio — an amount you can take

out each year and still feel secure that you won’t run out of money. Some people

make the mistake of withdrawing too much, too soon, once they’re retired. Your

withdrawal rate should be based on several factors, including your age at retirement,

the size of your portfolio and the amount of income you receive from other sources,

such as Social Security. A financial professional can help you determine a

withdrawal rate that’s appropriate for your needs.

• Market volatility – The financial markets

will always fluctuate. When you’re still working, this volatility may not be

such a problem, as you have years or decades to recover from short-term downturns.

But when you retire, you don’t want to have to sell investments when their price

is down. To help prevent this, you can tap into the cash in your portfolio, assuming

you have enough to cover several months’ worth of living expenses. You could also draw on a CD “ladder” — a group of CDs that

mature at different times — to provide you with resources for the next few

years and allow your equity investments time to recover their value.

• Unexpected costs – You had them when you were working, and you’ll probably have them

when you’re retired: the furnace that breaks down, the car that needs a major

repair, and so on. But if you’ve established an emergency fund containing a

year’s worth of living expenses, with the money kept in a liquid account, you

may be able to “ride out” these costs without jeopardizing your investment

portfolio. Be sure to keep these reserves separate from your typical day-to-day

accounts to avoid the temptation of spending your emergency money.

• Health – Retirees may face more health concerns than

younger people, and those concerns often come with larger medical bills. That’s

why it’s important to maximize the benefits from Medicare or your Medicare

Advantage plan. Also, if you contributed to a Health Savings Account (HSA)

while you were working, and you haven’t depleted it, you can use the money in

retirement. As long as the HSA funds are used for qualified medical expenses,

withdrawals are tax- and penalty-free, and won’t be included in your income. This

could help keep your income below certain levels, lower your Medicare premiums

or avoid the 3.8% surtax on net investment income that can be assessed on high-net-worth

taxpayers.

Retirement

can be a pleasant time in your life — and you’ll enjoy it more if you’re prepared

for the challenges that face all retirees.

Chad Choate III, AAMS

Bradenton's Riverwalk

828 3rd Ave W

Bradenton, FL 34205

941-462-2445

chad.choate@edwardjones.com

This article was written by Edward Jones for use by your local Edward

Jones Financial Advisor.

Edward Jones, Member SIPC

Biggest threats to a comfortable retirement...

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Edward Jones - Chad Choate, AAMS

Long Term Care Insurance 828 3rd Ave. W., Bradenton, Florida, 34205

Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.

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