Page 13 - Southern Exposure - July '23
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Southern Exposure, Page 13
finanCial foCuS ®
Biggest Threats To A Comfortable Retirement?
By Sally Sima Stahl
If you save and invest for decades, you’d like to know your retirement income, you will need to own a reasonable portfolio and the amount
you can retire without financial worries. Nonetheless, you number of growth-oriented investments, such as stocks of income you receive
still have to be aware of some threats to a comfortable or stock-based funds, whose potential returns can equal from other sources, such as
retirement — and how to respond to them. or exceed the inflation rate. Social Security. A financial
These threats include: • Excessive withdrawals – Once you retire, you professional can help you
• Inflation – Inflation has been high recently, but even should establish a withdrawal rate for your portfolio — an determine a withdrawal rate
a mild inflation rate can seriously erode your purchasing amount you can take out each year and still feel secure that’s appropriate for your
power. In fact, with just a 3 percent inflation rate, your that you won’t run out of money. Some people make the needs.
expenses could double in about 25 years — and your mistake of withdrawing too much, too soon, once they’re • Market volatility –
retirement could easily last that long. So, if you’re going retired. Your withdrawal rate should be based on several The financial markets will
to rely on your investment portfolio for a sizable part of factors, including your age at retirement, the size of your always fluctuate. When
you’re still working, this
volatility may not be such a problem, as you have years or
decades to recover from short-term downturns. But when
you retire, you don’t want to have to sell investments when
their price is down. To help prevent this, you can tap into
the cash in your portfolio, assuming you have enough
to cover several months’ worth of living expenses. You
could also draw on a CD “ladder” — a group of CDs that
mature at different times — to provide you with resources
for the next few years and allow your equity investments
time to recover their value.
• Unexpected costs – You had them when you were
working, and you’ll probably have them when you’re
retired: the furnace that breaks down, the car that needs
a major repair, and so on. But if you’ve established an
emergency fund containing a year’s worth of living
expenses, with the money kept in a liquid account, you
may be able to “ride out” these costs without jeopardizing
your investment portfolio. Be sure to keep these reserves
separate from your typical day-to-day accounts to avoid
the temptation of spending your emergency money.
• Health – Retirees may face more health concerns
than younger people, and those concerns often come
with larger medical bills. That’s why it’s important to
maximize the benefits from Medicare or your Medicare
Advantage plan. Also, if you contributed to a Health
Savings Account (HSA) while you were working, and you
haven’t depleted it, you can use the money in retirement.
As long as the HSA funds are used for qualified medical
expenses, withdrawals are tax- and penalty-free, and
won’t be included in your income. This could help
keep your income below certain levels, lower your
Medicare premiums or avoid the 3.8 percent surtax on
net investment income that can be assessed on high-net-
worth taxpayers.
Retirement can be a pleasant time in your life — and
you’ll enjoy it more if you’re prepared for the challenges
that face all retirees.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward
Jones, Member SIPC.
Edward Jones is a licensed insurance producer in
all states and Washington, D.C., through Edward D.
Jones & Co., L.P., and in California, New Mexico and
Massachusetts through Edward Jones Insurance Agency
of California, L.L.C.; Edward Jones Insurance Agency of
New Mexico, L.L.C.; and Edward Jones Insurance Agency
of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors
cannot provide tax advice. You should consult your
qualified tax advisor regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, AAMS,
1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
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