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Friday, July 24, 2015

Questioning Retirement Assumptions

Questioning Retirement Assumptions


Many baby boomers expect a typical, planned out and smooth retirement

This is possible for many of them, but for others, the road will be different. There is not a generic road to take when it comes to an individual’s personalized retirement plan. Financials, life expectancy, and health lead individuals to create their own retirement path and plan. 


Here are some assumptions that many people have on retirement.


#1 Take social security as late as possible because you will most likely live 15-20 years after you retire

v  People born in the years 1943-1954 will have a 25% smaller monthly benefit if they claim their Social Security at 62 instead of the “full” retirement age at 66. So the question is why would anyone take their social security so early in their 60’s?

v  The answer is that people may really need that income for medical bills, and other essentials. Some individuals don’t expect to live 15-20 years after retirement due to hereditary diseases. Evaluate your own life and future and then make that decision.


#2 You shouldn’t invest as you get older, and the payout of a lump sum is the best option.

v  As investors grow older they want to take less risk in their investment portfolios. This doesn’t have to be the case for everyone, there are many retirees that have insufficient savings and may need to continue to invest. Sometimes the outcomes can override the risks taken. 

v  Meanwhile, many corporations are offering a choice for pension plan assets as either a lump sum payout or periodic lifelong payments.  Both are options and depend on life expectancy, so these decisions are circumstantial and unique to each individual.

Posted by: Patrick Carroll at 9:54 AM
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This material is intended for historical purposes and may be outdated. Its contents should not be relied upon as current information. For more up-to-date information regarding these topics, contact your financial professional.

All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through ACI Partners, LLC. ACI Partners, LLC is not affiliated with Triad Advisors.