Business:Investing
What kinds of things do you need to plan for? While you might not know what the future holds, you can be financially prepared for it.
Key Points:
0:40 - We can’t wait for some fall football!
2:19 - What retirement uncertainties are there?
4:04 - What is your life expectancy?
6:02 - Future tax rates are unknown but should be considered.
10:30 - What about the solvency of Social Security.
12:42 - How do you plan for healthcare needs?
14:52 - What about inflation?
More About Today's Episode:
How do you construct a plan for retirement when you have to account for unpredictable factors? We’ll talk through five things that can come up during retirement. The best way to start is by having a really good, written plan.
No one knows how long they will live. So, David recommends making a plan that has your money lasting until you’re 100 to be safe. Another thing to look out for is if one spouse dies earlier than expected and leaves the surviving spouse without everything in place. Do some “what-if” strategizing with your retirement plan.
Future tax rates can make a big impact on your finances, but we can’t be sure what they will be. We can try to predict what they will be. Right now, they are historically low, so it is probably best to assume they will go up. David shares what the tax brackets could look like. Don’t forget that this bracket would change if one spouse passes away and you go from married filing joint to filing single.
What changes to Social Security might change your retirement plan? David thinks it’s likely that they will raise the full retirement age. The amount that comes out of your paycheck may raise as well.
Another unknown is what kind of healthcare needs you’ll have. Ask, what if one spouse needs several years of care? What happens to the other spouse financially?
Finally, inflation is something we’ve been talking about a lot lately in the news. Your plan has to include some amount of inflation. Over the course of retirement, potentially 25-35 years, inflation has to be built in as it is bound to go up over that time. Talk with a financial advisor to make sure all of these uncertainties are adequately covered in your financial plan.
For additional financial resources, visit us online: http://coveryourassetskc.com
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