I Am Getting Younger

by Krantcents · 28 comments

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I am getting younger!   My hair is still gray and chronologically I am still sixty-five (65) years old, but I feel much younger. According to http://www.Realage.com, I am  ten (10) years younger to be exact!  Maybe it was the hip car, I just bought?  Maybe my recent blood work will reveal something?  Maybe, it is all the attention I get from much younger women!  Why does this matter?  It means I will live longer!

Why should you care?  If I live longer, I will use more Social Security and Medicare!  More importantly, I need to put more money into savings to take care of me.  Before I was aware of my improved health, I was only planning on living a mere thirty (30) years in retirement.  I was planning on retiring (again) in five (5) years and living to just a hundred (100) years old.  If I make it to a hundred and one (101), I am out of luck!

Trying to predict how many years you will need in retirement is at best a reasonable guess!  Yes, there are many calculators from mutual fund companies that will help you figure it out.  The reality of the situation is you want to err on the side of more time versus less time.  Why is this important?  When I retire, I plan on spending money because I must withdraw funds from my IRA (401k et al).  I expect to travel multiple times a year, spend on leisure activities, and take classes.  After all, I am younger and I want to have a good time!

No matter how much money you have, you can spend it all.  Now that I have more time thanks to a healthy lifestyle, I now have to consider inflation.  Time and inflation affect your savings more than other factors.  Of course, you may not have enough money, but planning should avoid that problem.  Isn’t that right? If you live too long or inflation eats up the rest of your savings, what do you do?  This is your dilemma!

There are many tools out there to help you calculate your retirement.  One of the best is Fidelity Income Strategy Evaluator.  It will help determine your investment strategy to achieve the desired monthly income you need in retirement.  What is your asset allocation?  Are you conservative or aggressive?  Fidelity has a number of tools and calculators to help you with your asset allocation.I think a lot depends on your age and what other income streams you have during your earning years as well as during retirement.  How much of your portfolio should be fixed income or equities?

Right now, according the government inflation is very low, however real inflation affects our buying power in the necessities of life.  Food and gas are commodities that the CPI excludes from their inflation percentage.  Between food and all the products that require transportation, you cannot escape inflation.  What can you do?  You could invest in those products and that will help mitigate inflation or look for other investments that grow with inflation.

Have you considered a different investment strategy such as income property, antiques, collectibles or art?  Income property can provide a great hedge against inflation and a monthly income.  If income property does not interest you or you do not wish to deal with tenants, there are investment vehicles such as REITs which provide a similar hedge.  Antiques, collectibles and art are also good hedges against inflation, but you need to learn more about them before you invest.

Final Thoughts

I am not the only onee getting younger, but all of us are living longer!  Everyone needs to consider how long you will live in retirement and how inflation will affect your savings.  Remember, asset allocation is important for investing during your earning years, but more important in your retirement years.  It affects how much savings you will accumulate over time.  Take into account all your income streams such as Social Security, pensions, brokerage accounts, Roth IRAs and other investments.  If you put in the time now, you will have a better retirement and you won’t use it all up.   I am getting younger, how about you?

Photo by: Dave in the Triad





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