Finishing Life Well with Passive Property Income

Financial retirement strategy can be difficult. Saving for retirement (accumulation) is only half the battle the real challenge begins when it's time to turn that savings into income that lasts (distribution). Ive found that many of those that do well during the accumulation phase have little idea what to do during the distribution phase. In Tom Hegnas great book, Pay Checks and Play Checks, he addresses this by looking at risks that every senior must think about and mitigate during the distribution phase of their financial retirement strategy. Have you thought through these risks and planned accordingly?Inflation riskYou may be in danger if this characterizes you: Im so scared of the stock market and losing money that Id rather just keep all my money somewhere safe like a savings account.             Inflation is a virtually guaranteed to eat away at the purchasing power of your retirement savings. That means that whatever money you currently have saved for retirement wont be able to buy nearly as much in 10 or 20 years as it can now. Inflation has surged in recent years, with some years nearing 67%, reminding us how quickly prices can rise and purchasing power can shrink. Lets look at some numbers and imagine you have $100,000 in a savings account that offers virtually no growth. If we estimate an annual inflation average of 3% for the next 20 years, your same $100,000 would have the equivalent purchasing power of $55,368 in todays dollars. In other words, letting $100,000 sit without growing for 20 years is like giving up nearly half your purchasing power thanks to inflation quietly eating away at it year after year.Application: You should consider investing your retirement savings in something that will at least outpace inflation (something that will earn 3-4% or more).Longevity riskYou may be in danger if this characterizes you: I have some money in my retirement savings, but I havent really thought through a plan for withdrawing it. I figure Ill just withdraw money as needed and I should be ok.             As people live longer, our retirement savings must last longer as well. With average life expectancy in the U.S. near 80 and normal retirement at age 65, some plan for their savings to last 15 years. However, since 80 is the average life expectancy, many will live beyond that. Statistics also say that if youre married, you have a better chance to live longer. If you have a husband and wife who are 65, there is a 50% chance that one of them will live to age 92. To be safe, it would be wise to at least plan for your retirement savings to last 25-30 years. To help accomplish that, many financial advisors suggest following the 4% rule. (Some adjust it to the 3% rule to be extra cautious). That is, that you should only withdraw 4% of your retirement savings in the first year of retirement and then adjust annually for inflation. That may seem extremely cautious, but the last thing you want to do is run out of your retirement savings at age 91. What options would you have then? Longevity is also a risk multiplier because the older you live, the greater the chances that you will face large health and financial risks that could devastate your retirement savings.Application: It may be wise to consider utilizing a vehicle like an income-focused annuity that is designed to stretch your retirement savings and provide lifetime income that will last as long as you do.Volatility riskYou may be in danger if this characterizes you: I know that I must risk my retirement savings if I want to see it grow. Therefore, I keep all my retirement savings in market-based products like mutual funds, stock, bonds, etc.             Relying completely on the long-term upward trend of the market makes sense for the 30-year-old still in the early years of the accumulation phase of financial retirement strategy. However, for the 65-year-old transitioning into the distribution phase of financial retirement strategy, more caution is advised. At that point, you have much less time to make up for large losses that come with market volatility. If you are wealthy, with hundreds of thousands of dollars in safe investments--by all means, risk larger portions of your retirement savings in market-based products with the hope of earning more. However, if you only have a few hundred thousand dollars (or less) in your retirement savings, you need to seriously consider volatility risk. And be careful when people speak of diversification being the magic bullet with your market-based retirement savings. Yes, diversification is good. But if all your diversification is in market-based vehicles and the entire market takes a dive, what happens then? Was that really true diversification? A simple rule of thumb you can use is the rule of 100. (Some call it an oversimplification, but it can be a good quick reference and starting point). Subtract your age from 100 to determine the percentage of your retirement savings allocated to volatile investments, with the remainder going into safe investment vehicles. For example, a 70-year-old would allocate 30% of her savings into risky, market-based investments while allocating the other 70% into safe retirement vehicles. What does your retirement savings allocation look like when using the rule of 100?Application: Its wise to consider protecting more of your retirement savings as you get older. The more money you have, the more money you can risk in volatile investments. However, if you only have a few hundred thousand dollars (or less) in your retirement savings, you may want to consider being more conservative when it comes to volatility risk.Order of return riskYou may be in danger if this characterizes you: Im ok having a large amount of my retirement savings at risk to market fluctuations when Im near retirement age. I can always reallocate to safer options later.             During the accumulation phase of financial retirement strategy, the focus is on average return from your investment over a period of years. However, once you begin the distribution phase, the rules change. Studies show that experiencing a large loss from a market downturn in the years immediately before and after retirement have a much larger negative impact on how long your savings last than experiencing a similar loss at the end of your retirement years. To illustrate this, lets look at an example. Imagine Person A and Person B both retire and begin taking distributions at age 65, live to age 90 and see their retirement savings grow at the exact same rate of return over those 25 years. However, Person A experiences a large loss from market downturns at the beginning of retirement while Person B experiences a large loss from market downturns at the end of retirement. The studies show that Person A is in much bigger trouble than his counterpart and will likely see his retirement savings depleted years earlier.  When will the next market crash happen? No one knows but its a risk that should be seriously considered.Application: What some refer to as the golden window or Retirement Red Zone is around 5 years before retirement and 5 years after retirement. Experiencing a large loss from a market downturn in those years could be devastating to your financial retirement strategy. Therefore, its wise to consider protecting a large portion of your retirement savings during those critical years. Retirement should mean freedom to do the things you want to do. When it comes to financial retirement strategy, these are just a few of the main risks that everyone must navigate in order to most experience that freedom. You worked hard to save and accumulate your retirement savings. Once retired, you must work hard to educate yourself and make wise decisions so that your retirement years can be as relaxing and enjoyable as possible. Find someone you trust, that you can talk with about your specific situation and mitigating these risks. Make sure theyre looking out for your needs and not just their own. I wish you the best and heres to a great retirement!

Many Colorado Seniors and Disabled Adults are concerned about the recent funding discussions about Federal, not State, Medicaid changes, and how they might impact Long-term Care Medicaid benefits here in Colorado. There are 40+ different Medicaid programs in the State of Colorado alone, which are funded differently. Some of these Medicaid programs will be impacted by Trumps changes.At this time, it is important to know that the Medicaid changes imposed do not affect Long-term Care Medicaid in Colorado. If you are currently receiving Long-term Care Medicaid benefits or considering applying, you can rest assured that your eligibility, services, and coverage remain intact. Long-term Care Medicaid has already been funded for 2025, therefore nothing will change this year. In addition, there have not been any major changes to Colorado Long-term Care Medicaid in 20 years, and we dont foresee any changes now. In the meantime, if you have any questions about your coverage or need assistance navigating the Long-term Care Medicaid process, please dont hesitate to reach out to Beneficent. www.DoingGoodForOthers.com/contactus

Managing your finances can feel daunting, especially as lifes expenses add up. But with the right strategies, you can take control, stretch your dollars, and enjoy peace of mind. Here at Seniors Helping Seniors, we believe financial independence is empowering, and were here to help! From grocery savings to solar panels, these practical tips will guide you toward a brighter, more secure future.1. Shop Smart and Save at the Grocery StoreMany grocery stores offer senior discountsan easy way to save on everyday essentials. Pairing these discounts with meal planning can help stretch your weekly budget. Need a hand? A Seniors Helping Seniors caregiver can assist with planning nutritious meals while keeping costs down.2. Tap Into Free or Low-Cost Community ResourcesYour community likely offers a variety of free or low-cost services designed for seniors. Think meal delivery programs, recreational activities, or transportation services. Staying active and connected doesnt have to break the bank, and these resources can add tremendous value to your lifestyle without adding to your expenses.3. Take Advantage of Senior DiscountsFrom restaurants to retail stores, discounts for seniors are everywhere! Many establishments offer lower prices or special deals for older adults. Whether its a favorite coffee spot or a hardware store, these small savings add up, making it easier to enjoy your favorite things while staying within your budget.4. Use a Budgeting App to Track Your SpendingSimplify money management with a budgeting app. These tools make it easy to monitor your spending on groceries, utilities, entertainment, and more. If technology feels overwhelming, your caregiver can guide you through setup and show you how to track your finances effectively. Its a small step that leads to big financial clarity.5. Automate Savings and Bill PaymentsAvoid late fees and grow your savings by automating your finances. Set up automatic transfers to your savings account or schedule recurring bill payments through your bank. This hassle-free approach helps ensure your bills are always paid on time, leaving you more time to focus on what matters most.6. Work With a Caregiver for Personalized SupportA Seniors Helping Seniors caregiver can be your budgeting buddy. From spotting local discounts to helping you navigate government programs, your caregiver can provide personalized assistance. Together, you can create a financial plan that fits your needs, so you can spend less time worrying and more time enjoying life.7. Save on Energy with Solar PanelsIf youre ready to invest in long-term savings, consider solar panels. They harness renewable energy, reducing your electricity bills and your carbon footprint. With available tax credits and rebates, going solar might be more affordable than you think. Plus, its a great way to contribute to a greener planet.A Brighter Financial Future AwaitsYour golden years should be filled with joy, not financial stress. These tips are designed to help you budget smarter and save more, empowering you to live life fully and confidently. If youre feeling overwhelmed, our Seniors Helping Seniors team is here to help. With expert guidance and a caring approach, well work alongside you to create a plan that fits your life.Lets tackle those finances togetheryouve got this!Seniors Helping Seniors Making Life Easier, One Step at a TimeFor more tips and support, visit our website or contact your local Seniors Helping Seniors office.