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Household Budgeting for Retirement

Part of the retirement planning process is realistically imagining what you want your retirement life to look like. You’ll hear us talk a lot about your “sit on the porch number,” goals, objectives and things that make up what your dream retirement is for you. 

We know from working with lots of folks that there are chapters of retirement. Typically, your spending needs are not the same every year throughout your retirement. 

Most people’s first chapter is where you travel, pursue hobbies and spend more time with family and friends. 

The second stage of retirement is when people start to slow down and don’t get out as much, so they don’t spend as much money as they did before. 

Then there’s the final stage — when you need more money than ever to pay for things like large health care expenditures and help with assisted living.1 

As you can see, developing a retirement plan is more complex than just accumulating money and then spending it. We recommend having an income plan built so that you have multiple sources of reliable income. This step is critical in ensuring you have enough income to make that retirement dream come true. 

One source of retirement income that most Americans enjoy is Social Security. However, even this government-sponsored benefit is under duress. There’s been a focus in recent months on legislation for infrastructure bills and ways to economically rebuild the U.S. back to pre-pandemic levels. 

In addition, retirees just received their biggest cost-of-living increase in Social Security benefits in years. The problem is that neither Congress nor retirees (and approaching retirees) are actively lobbying to fix the current Social Security program. If Congress doesn’t come up with a supplement plan, retirees will see a reduction of about 22% of their current benefits beginning in 2034.2 

Another facet of retirement planning is having a contingency plan for when things don’t pan out quite the way you thought. For example, make sure your beneficiaries are up to date on all of your accounts, that they have the information necessary to access those accounts and contact information for your financial advisor or estate attorney, and consider buying long-term care insurance.3 

The bottom line is there is no one-size-fits-all strategy. Every client we’ve worked with has benefited from a tailored, customized plan to meet their changing needs over time. We develop a structured flexibility and that is key to making sure you don’t run out of money during retirement. 

Content prepared by Kara Stefan Communication and Scott Winstead. 

1 Dan Hunt. Morgan Stanley. Jan. 11, 2022. “What kind of retiree do you want to
be?” https://www.morganstanley.com/articles/retirement-life-spending. Accessed Feb. 21, 2022. 

2 Trina Paul. CNBC. Feb. 10, 2022. “Will Social Security run out of money? Here’s what could happen to your benefits if Congress doesn’t act.” https://www.cnbc.com/select/will-social-security-run-out- 

heres-what-you-need-to-know/. Accessed Feb. 21, 2022. 

3 Ameriprise. 2022. “Unexpected events.” https://www.ameriprise.com/financial-goals- priorities/retirement/preparing-for-unexpected-life-events. Accessed Feb. 21, 2022. 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. 

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