I Am Getting Younger

by Krantcents · 28 comments

Post image for I Am Getting Younger

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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{ 20 comments }

Kurt @ Money Counselor August 6, 2012 at 7:16 am

Getting younger: Now that’s a happy thought to start the week with!

While running out of money in retirement would certainly be an ugly outcome, I also consider the risk of spending more time than necessary at paid employment, working mostly to make someone else wealthy(ier). If I’m near death and still have $100,000 in the bank, I’ll be thinking: Wow, that represents a lot of time I could have been hiking or biking or traveling instead of working!

Krantcents August 6, 2012 at 12:00 pm

I like your philosophy! When I retire (again) I plan on changing from saving to spending.

Lance@MoneyLife&More August 6, 2012 at 8:57 am

I think in order to get younger I need to cut back on the junk food. I will be reevaluating my retirement planning in a couple years and will have to take that into account.

Krantcents August 6, 2012 at 12:07 pm

A healthy lifestyle pays off in a number of ways. Retirement planning is a little like goal setting.

Ornella @ Moneylicious August 6, 2012 at 10:30 am

congrats on getting younger! I agree with your article, but, I especially like the fact when you mentioned REITs. Far too many people think you have to buy physical real estate, but with REITs you can own real estate and diversity your investment portfolio, too.

Krantcents August 6, 2012 at 12:09 pm

REITS are a alternative to owning physical real estate. Every one should investigate all the choices out there.

Mo' Money Mo' Houses August 6, 2012 at 11:39 am

You know what, that’s one of my fears about retiring. Budgeting for me to live until 90 but living until 110! Is it bad that that is one of the reasons I want kids, so they can help me when I’m 100 and out of money? lol

Krantcents August 6, 2012 at 12:11 pm

Trying to predict how long you will live is difficult at best. Since my mother lived to nearly 99 years old, I think I will plan for a long retirement.

maria@moneyprinciple August 6, 2012 at 11:54 am

I have been thinking about this one lately – I may be getting ‘younger’ but still there is the possibility of something wiping me out in the next 5-10 years. At the same time what I consider perfect finance management is to have enough money for a decent funeral at the end (not too keen on this ‘leave inheritance’ to the children things). At the end is more witchcraft than planning!

Krantcents August 6, 2012 at 12:13 pm

Are you getting a lot of life insurance instead? :) I am planning for at least 30 years in retirement and will only work if I want to.

maria@moneyprinciple August 8, 2012 at 12:43 pm

Actually yes, I have quite a bit of life insurance. And serious pension :) .

Krantcents August 8, 2012 at 1:54 pm

I am getting close to retirement (again) and life insurance is less important. I am always thinking about things changing and want multiple income streams. I am also thinking about what I want to do in retirement. I want to start now so I will make good choices.

JW @ AllThingsFinance August 6, 2012 at 10:00 pm

When I retire in the next 30 years, who knows what the life-expectancy will be? I hope that by that time, I will be able to live off of interest alone. 6 – 8% yield…I’ll take that. This is assuming I’ll save $2 million and interest rates will climb by then of course.

Krantcents August 7, 2012 at 6:36 am

In a perfect world, it will work that way. Better to have multiple income streams because you may want growth to cover inflation over a 30 year period.

AverageJoe August 7, 2012 at 10:52 am

Congrats on your un-birthday! I get lots of attention from younger women also. They generally want to help grandpa across the street, but I’ll take whatever I can get….

Krantcents August 7, 2012 at 11:05 am

I didn’t say what kind of attention! :) Funny, I always felt younger than my peers and related to much younger people. It helps that I do not look or act my age!

Kathleen @ Frugal Portland August 7, 2012 at 3:55 pm

Happy birthday!

Krantcents August 7, 2012 at 5:02 pm

Thank you, but my birthday is in November.

Buck Inspire August 12, 2012 at 10:20 am

I’m getting older after reading this post! Haha. Great points, we can’t ignore retirement planning. I’m diversifying as much as possible, but don’t know much about art and antiques. Congrats on getting younger. Another reminder to stay healthy because medical expenses as you age can quickly eat your nest egg, too!

Krantcents August 12, 2012 at 10:57 am

Teaching provides a good medical/dental/vision plan for my wife and I. When I retire, I get medical for life! I just had a physical and my doctor says I am a 35 year old physically except for my back.

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