Why Working In Retirement Doesn’t Always Work

As we’ve all heard, even the best-laid plans can go awry.

When those plans involve retirement, the stakes are high. Let’s say you were planning on continuing to work in retirement to supplement your monthly income. It’s easy to see how a change in those plans could impact you significantly.

Sadly, some people interviewed by Business Insider found that to be the case in a recent article.1 Among the workers interviewed was a salesman with 42 years of experience and a veteran of the screen-printing industry. Each of them said that finding a new job as an older worker was a challenge, and they wondered if their experience was common.

The answer may be yes, at least as a trend. A study from the Federal Reserve Bank of San Francisco found that age can impact callback rates.2 The study found that older female candidates for administrative positions were called back at a 47% lower rate than their younger competitors. For women seeking sales-related positions, the rate was 36%.

There were discrepancies among male applicants, as well. Receiving a call back is just one measurement of job search success, but it can be a strong one. As other pre-retirees and retirees discovered, even if you aren’t looking for a job, layoffs or forced retirement could change your plans.

A ProPublica.org study that workers who enter their 50s holding full-time, long-term positions were often being pushed out of their positions by employers. Overall, the study found that of this group, 56% experienced employer-driven job loss, and only 16% were still working.3

The ProPublica study also points out another uncomfortable finding. Of those people who had some employment setback, such as an employer-driven job loss, only 10% were able to ever earn as much as they did before their employment setback. Even looking at data years later, those workers remained noticeably behind their peers who didn’t experience an employment disruption.

While that’s a lot of doom and gloom, there is reason to be hopeful about your future, as long as you are heading into it with your eyes wide open. Pre-retirees and retirees who know they’ll be depending on continuing income sources to reach their retirement goals can plan accordingly. Additional budgeting can trim your bottom line and working with a financial services professional can help you prepare a workable strategy for income in retirement.

The point that this research makes is important: It may be natural or easy to assume that you’ll be able to keep your full-time, long-time job if you continue to perform, and you want it. And that could be a dangerous idea.

If you have questions on how your retirement strategy can be changed to adapt to the future, you may want to reach out and set up a time to talk with a financial services professional.

That way, if your best-laid plans go awry, you’ll have a backup plan in place to help you adapt on the fly. At the end of the day, everyone wants the retirement they’ve always dreamed of — make sure you develop a strategy that can help you absorb the unexpected and stay on course.


1 https://www.businessinsider.com/working-in-retirement-doesnt-work-for-many-retirees

2 http://www.frbsf.org/economic-research/publications/economic-letter/2017/february/age-discrimination-and-hiring-older-workers/

3 https://www.propublica.org/article/older-workers-united-states-pushed-out-of-work-forced-retirement

Misconceptions That Could Derail Your Retirement

It’s hard enough to prepare for retirement when you’re working with correct information. Factor in the misconceptions that are out there, and it can feel downright impossible.

That seems like a good reason to try to cut through some of the misconceptions. The Motley Fool investigated three examples in its October 2019 article, “3 Money Myths That Could Ruin Your Retirement.”¹

The author, personal finance and retirement writer Katie Brockman, breaks down each of these things that she considers myths and how they can impact your retirement. “Myth” is a strong word, and “misconception” might be a little more accurate since each comes from some factual basis, but the end assumption is flawed in some way.

Take, for instance, the first misconception: The idea that you will spend less in retirement. According to the article, it’s likely that spending will change during retirement for most people. But it just might not be different in the way you’re expecting. The article cites a report from J.P. Morgan that showed nearly 80% of retirees experienced a significant change in their spending, but more than a third of them found themselves spending more than they had before retirement during at least some retirement years. For many of the survey respondents, the years they spent the most often came early in retirement.

You can imagine the challenge that would come with suddenly spending more than expected! So, this misconception could be expensive. You may average less spending per year over the course of your retirement, but that average may include years of more spending.

Another misconception from the article is that if you wait until you have a higher income, it will be easier to save for retirement. At first blush, it’s easy to rationalize this idea. Making more money would mean there’s more money to save. However, building a retirement nest egg can take years. If you put off saving for retirement you may find yourself needing to save an even larger percentage of your income. Missing out on years of potential annual rate of return can result in challenges later in life. Saving early, even if it’s a small amount, can have strong financial results.

The final misconception in the article deals with Social Security. In the article, they caution against assuming Social Security benefits can be your primary source of retirement income. According another Motley Fool article,“The Average Social Security Benefit Is Probably Smaller Than You Think²,” in 2019 the average Social Security check was just over $1,400. For many people, that’s likely not enough to cover all your monthly expenses. When you look at the potential growth of medical expenses in the future, you may feel even less enthusiastic about covering your costs with Social Security benefits alone.

What will be important is for you to maximize your Social Security income when the time comes. Working with a financial services professional can help you determine the right time and strategy for your personal financial situation.

Social Security, monthly expenses and delaying savings can all have a large impact on your financial future. Misconceptions, myths and incorrect assumptions about these issues can further cloud your vision of the future. By ruling out the information that isn’t helpful, you give yourself an easier path to retirement and make decisions that can help you realize your retirement goals.


1 https://www.fool.com/retirement/2019/10/24/3-money-myths-that-could-ruin-your-retirement.aspx

2 https://www.fool.com/retirement/2019/10/13/the-average-social-security-benefit-is-probably-sm.aspx

More People Are Saving For Retirement, But Many Still Aren’t

More people are saving more money for retirement than they have in the past few decades, according to a recent report from the U.S. Government Office. That’s great news!

Now for the not so great news. The report, titled “Retirement Security: Income and Wealth Disparities Continue through Old Age,” found that there’s still a lot of ground to cover to get retirement savings where they may need to be.

The report found that 30 years ago, in 1989, about 4% of low-income households and up to 65% of high-income households had set aside money in a retirement account. Those percentages increased to 11% and 86% of households, respectively, in 2016.

The report largely credits that increase in the number of people who are saving to more employers offering defined contribution plans. These include the tax-code-numbered plans that you are likely familiar with, like 401(k)s and 403(b)s. Another process that gets credit for the increase, according to the report, is that more employers are automatically enrolling their employees in their employer-sponsored defined contribution plan.

In 2018, Vanguard reported that 48% of their plans had an automatic enrollment option. In many cases, automatic enrollment applied to new hires only at first, but many plans have been expanded to include existing employees. This helps frame the decision to enroll for the employee as an opt-out rather than an opt-in.

And it’s not just that more people are saving. More people are saving more. That’s thanks in part to the fact that enrollment is not the only automatic feature of many employer-sponsored defined contribution plans. Most of these plans — 66% — also have automatic annual deferral rate increases. These increases in contributions can help employees automatically adjust for potential inflation and save just a bit more each year.

While these are encouraging statistics, the number of low-income households that are saving for retirement have not returned to levels seen before the 2007-to-2009 recession. In 2007, 16% of households in the low-income category had some kind of retirement account.

Among those retirement accounts, the defined contribution plan reigns supreme in terms of usage. According to The Vanguard Group’s “How America Saves 2019: The Retirement Savings Behavior of 5 Million Participants,” more than 100 million Americans are covered by defined contribution plan accounts.

Even with that many individuals participating, the report cites that a significant amount of those who are eligible for these types of plans fail to participate. Those who decline to participate are missing out on another potentially valuable opportunity: employer matching contributions. A third of all plans provided both matching and nonmatching employer contributions. These contributions can help increase the balance of a retirement account.

So, the good news is that more Americans are opening retirement savings accounts. If you’re one of them, you are doing the right thing to help prepare to have income in retirement.

If you’re not, there’s still time. If you have access to a defined contribution plan that you aren’t utilizing, it’s better to put something away than nothing. And that’s only one option of many that can help you prepare for retirement.

Contact a financial services professional today to get started on a strategy that can help take you to retirement and beyond.


Are You Prepared For a Bear Market?

If you’ve ever visted New York City, you may have seen the famous bull statue in the financial district.

That bull is considered a sign of optimism, indicative of what’s known as a bull market. A bull market generally refers to a time when the stock market is rising and is expected to continue to rise, but it can refer to any group of securities in which that is the case.

The reverse of a bull market is a bear market. A bear market is generally a period marked by pessimism and potentially falling prices in the stock market.

The good news is that we are currently enjoying the longest bull market on record. For more than 10 years, we’ve experienced a rising market that has seen numerous record highs and only a few market corrections (in this case, drops) to level it off.

While many investors, pre-retirees and retirees have enjoyed the fruits of a long-term rise in the markets, we unfortunately can’t expect that to continue forever. And that means the potential for a bear market exists.

While the causes of bear markets often vary from event to event, many economic slowdowns usher in bear markets. Signs of an economic slowdown include low employment, shrinking disposable income, weak productivity and a drop in business profits. A market correction can easily transform into a bear market due to prolonged periods of investor uncertainty. Bear markets can develop when the market isn’t able to support stock prices — like when the tech bubble burst in the early 2000s.

When we experience a bear market, sooner or later, will you be prepared for it? And how will you react? During those times, it may be more important than ever to remain committed to your overall investment strategy. On the flip side, your strategy may need a change.

One tool we use at our company to help you evaluate your strategy and whether you should stay the course or change it is the Color of Money Risk Analysis. This 11-question self-assessment quickly and clearly evaluates your current financial outlook and provides a Color of Money Risk Analysis score.

The Color of Money Risk Analysis is a simple way for you to categorize your retirement assets into red, yellow, and green money, giving you an easy way to see how your assets could be allocated.

Red money are assets that are subject to risk and that can lose value but that also provide growth opportunity.

Yellow money assets, like red money assets, are subject to risk and can lose value but are professionally managed. Professional money managers could help reduce risk and provide growth opportunities.

Green money assets have a less amount risk. They may not have as much growth potential as other assets, but your money is less likely to shrink.

Once you’ve received your score, we can begin analyzing how your savings is currently allocated. From there, we’ll help make sure your assets are properly aligned with your risk tolerance.

No matter if you use our Color of Money Risk Analysis or another tool, there is value in having an up-to-date understanding of your risk tolerance. Talking to a financial services professional is a great way to get started in that direction.

That way, when a bear market inevitably arrives, you might feel more prepared for it.

One in Three People Over 50 Aren’t Prepared For Retirement

Think about three people you know who are over 50. Odds are, at least one of them isn’t prepared for retirement.

At least, that’s the premise of an article the USA Today recently published, “A third of adults age 50 and over aren’t prepared for retirement1.” Are you one of those adults who’s not prepared for retirement? How can you determine if you’re in that group?

It’s not always easy to determine if you’re on track for a healthy retirement, especially when you may have many years left before your retirement. One useful way to determine if you’re on the right track is to try to have a retirement savings goal in mind.

You can start by looking at your current income and estimate what percentage of that income you’ll need in retirement to cover your expenses. You can use a retirement calculator like the ones provided by AARP.com and Nerdwallet.com to help come up with an estimate.

While calculators can be useful, they may also provide an incomplete picture at times. That’s why you may want to meet with a financial services professional to examine your personal situation to help determine your long-term options. Your financial services professional can help you examine that retirement calculation and find how much you may need to increase your savings.

Once you’ve determined your possible future income needs, you may find that you need to begin saving more of your current income. While this is always easy advice, it can be hard to put into place, especially during times when money is tight. It can be discouraging.

Depending on your situation, you may even be tempted to avoid saving more simply because you feel the situation is too dire already. However, even saving a little today can grow over time. Starting can be as simple as determining where your income is currently spent. Track your spending by dividing it into categories. Creating the lists that detail your spending by category can be an eye-opening experience and you may find areas that you can reduce or adjust to impact your savings.

It may be that you find that you need to take drastic measures to get your retirement savings back on track. Social Security will likely be a part of your retirement income. Your financial services professional can also help you maximize your potential Social Security benefit, and this could help you address your savings deficit, if you have one.

Social Security is a part of many people’s long-term plans, but many people don’t realize how much they may need to supplement their Social Security benefit in order to live a life like the one they had before retirement. In fact, according to the Social Security Administration’s Monthly Statistical Snapshot as of July 2019, the average monthly retirement benefit is just under $1,400. And remember that’s just the average, not a guarantee. Your personal benefit could be very different.

If you take that average monthly benefit and multiply it by 12 to get an annual income figure, you’re looking at less than $17,000 a year. For many people that wouldn’t replace much of their current income. It may seem more like the amount of money that one would make from a part-time job. That is why I believe it should only be counted on to be a part of your monthly retirement income. This is only one component of determining if you’ll be ready for retirement.

Contact a financial services professional — it’s a great way to help you get an idea of what income you’ll need in retirement and how you’ll get there.





Exclusive rights to this material belongs to GPS. Unathorized use of the material is prohibited.

Unearthing Three Harsh Realities of Retirement

As you prepare for retirement, it may be helpful to know that there are some potential realities that traditional retirement advice may overlook or ignore.

A few of these were highlighted in “3 Harsh Realities Retirement Advice Almost Always Ignores,” an article published on Yahoo Finance on June 24, 2019. Let’s dig into each of these realities.

It’s common for people working on their retirement strategy or savings goals to hear the same kind of advice over and over. Save more, invest wisely and be aware of the risks that can pop up before and during retirement. That seems like an easy idea in theory. But in practice, it can be much harder to do.

One thing you don’t always hear acknowledged is how hard it can be to save instead of spend. If you want to save more and accumulate wealth, you have two choices: spend less or earn more. This leads to many additional options, like getting a second job or developing new budgeting techniques. The harsh reality is that most financial planning early in life demands sacrifice.

Our consumer-driven society encourages immediate gratification. Saving for enjoyment down the line is responsible and smart — but is rarely fun. To overcome this challenge, you must be prepared to skip some popular trends. It may require you to live a life that’s different from most of your friends and family.

A second piece of advice that isn’t always discussed is that you may need to overcome the fear of losing everything. Striking out on your own and finding your own path to financial security is never easy. It’s also never easy to overcome the fear of losing. For example, you may say that you’re going to stick to your financial strategy no matter what the market does, but it’s much harder to follow through on that plan when the market is volatile. Bad news gets headlines and market downturns can inspire any investor to look at changing course. It can be helpful to try to avoid the 24/7 media frenzy that the stock market can create and stick to your plan.

A helpful tool in this process can be to examine your risk tolerance. A financial services professional can help you with determining your risk tolerance and an investment mix that aligns with it. You should note that asset allocation doesn’t guarantee a profit or protect against loss. All investing involves risk, including the possible loss of principal. Working with a professional can help you align your investments with your risk tolerance and potentially protect some of your emotions from this roller coaster effect.

Finally, you should know that you can’t possibly prepare for every financial risk or scenario. Understanding your risk tolerance allows you to examine which options may be a fit for you, but it’s impossible to get rid of all risk. Challenges like unexpected healthcare costs or long-term care changes could be around the corner. It’s possible that the next big upheaval related to retirement is a scenario that we can’t even imagine.

These realities shouldn’t discourage you from moving forward with your retirement dreams. They may have affected your financial strategy in the past, but hopefully by talking about them today and putting them in the spotlight, you’ll gain the confidence you need to continue your financial journey.

The reality is, retirement is coming whether you’re ready or not. But working with a financial services professional may help you feel a little more prepared.

Exclusive rights to this material belongs to GPS. Unathorized use of the material is prohibited.


Annuities: You’ve probably heard of them before and some of you might be quite familiar with annuities as a retirement income option.

Because they can be confusing and have many different options, it can help to have some information that simplifies the concept of an annuity.


First of all, what is an annuity?

An annuity is an insurance product you can purchase that may promise a certain level of income for life. Some reasons people purchase annuities are to generate lifetime income, grow tax-deferred retirement savings, and provide a legacy for their heirs.


How do annuities work?

You pay money into the insurance company, and in return you receive an income stream specified by the contract. Alternatively, you may elect not to take periodic income payments — enabling interest to accumulate within the annuity — and then withdraw a lump sum at the end of the contract period.

There are also tax benefits to an annuity. Money grows tax-deferred within the annuity, meaning you pay no tax on the earnings until you take them out. And unlike 401(k) plans and IRAs, there is no annual limit on the amount you can put in a non-qualified annuity.


What types of annuities are available?

There are several different types of annuities and a wide variety of riders you can add for different functions.

A fixed rate annuity has a stated rate of return and no loss of principal due to market downturns. A fixed indexed annuity has a rate of return that may be linked to an external market index (like the S&P 500), but still may offer a minimum rate of return and no loss of principal or interest credits if the market index declines. So, if the market index rises, interest is credited to the annuity.

A variable annuity offers a choice of investment sub-accounts, similar to the choices in a 401(k). This provides a chance to earn higher returns than a fixed annuity or fixed indexed annuity but with greater risks, including potential loss of principal. There are also choices based on when you want to start taking income from an annuity. Just as the name suggests, an immediate annuity starts paying you income very soon after you buy it.

A deferred annuity doesn’t start paying income until a point you designate in the future. In the meantime, your money earns a rate of return that’s rolled up, or added, to the account and income value within your annuity. In fact, you don’t ever have to take income out of the annuity, if you don’t need it. The money can keep growing, tax-deferred.

Now let’s look at caveats — the due diligence you need to do before making a financial commitment. Is it right for you? Annuities aren’t for everyone. You need to be certain an annuity is right for you, and after that which annuity is the right choice for your retirement needs.

One thing to be aware of is that annuities may charge fees in some instances. The fees can vary tremendously based on the kind of annuity you buy, the riders you add and the company offering it.

Another thing to understand is that annuities are a long-term commitment and they are primarily designed for retirement income. If you take an early withdrawal, you may incur a surrender charge. Additionally, if you take funds out before the age of 59½, there may be an additional 10 percent IRS penalty.

The insurance company, not the government, guarantees your annuity, so it is recommended that you check out their financial strength by going online to independent ratings agencies such as AM Best, Moody’s and Standard and Poor’s.


For some people, annuities can be a source of income in retirement. To determine if an annuity is right for you, it can help to contact a financial services professional.

Why Phased Retirements Can Be Hard To Pull Off

A traditional retirement is the culmination of a lifetime of work and is, typically, a person’s permanent withdrawal from working. A phased retirement is the gradual reduction of working hours, giving employers and employees the opportunity to adjust to a new working reality over a period of time.

Often, when a worker leaves employment, for retirement or another reason, there is a chaotic period of adjustment. A phased retirement or flexible work arrangements can help alleviate some of that chaos. That doesn’t mean it’s easy, though. Though some employers share a mutual interest with employees to phase retirements, many don’t have the systems in place to pull it off.

MarketWatch.com addressed this in an article titled, “Why are employers so bad at phased retirement?” The article explores some ways companies can offer phased retirement to employees, and some reasons that it doesn’t work for certain companies.


First, let’s discuss some of the ways companies phase retirements. MarketWatch.com cites a program that permits employees aged 55 years or older and who have at least 10 years of work history to cut their hours by 20 percent. That includes a corresponding 20-percent cut in pay, but permits the employee to keep their health insurance and pension accrual benefits.

Another program permits employees aged 60 and older who have at least five years of work history with the company to reduce their hours by anywhere from 20 percent to 50 percent. Employees could reduce their hours by even more if they’re willing to lose their health insurance benefits.

Yet another employer permits workers 55 and older with seven years of service to negotiate their own “glide path” to retirement — like a paraglider slowly heading toward a landing, moving from full-time employment to full retirement, while retaining benefits. There was yet another company cited in the MarketWatch.com article that permits any employee to switch to less stressful or complex duties or phase to part-time work — all the while, retaining health insurance if they work at least 25 hours a week.

So, there are many different types of phased retirement options, and it’s not hard to imagine companies being able to find a customizable solution that would work for them. That said, it’s simply not something that we’re seeing a lot of companies do.

Over time, I believe that more and more employers will offer phased retirement options. The MarketWatch.com article references a WillisTowersWatson.com report entitled “Working Late – Managing the Wave of U.S. Retirement.” In that report, 83 percent of the employers surveyed said that a significant number of their workers are nearing retirement. 54 percent of those employers believe that the loss of talent and experience from workers retiring will be one of the most significant labor challenges of the next five years.

It certainly can be a challenge to replace any experienced worker — much less a number of them at the same time. In fact, in the Willis Towers Watson report, they cite approximately four out of five employers ranked “orderly transfer of knowledge of the organization” as the number one concern when it comes to managing retiring employees. The report also cited that 60 percent of the employers felt that erratic retirements impact workplace productivity, and nearly one-third mentioned roadblocks to younger workers’ promotions as another concern. These concerns were nearly universal among younger and older aged workforces.

So it’s clear that most businesses, regardless of the age of their workforce, have some large concerns about how retirement is going to impact them2. Phased retirements could be a solution that could alleviate some of those concerns.

There’s another important discrepancy between employers’ impressions of their employees’ needs and how the employees view their own needs — and it’s the likelihood that employees have enough savings to retire. Willis Towers Watson reports that 71 percent of employers believe most of their workers who are nearing retirement age likely have enough. More than half of the employees themselves, though, said that they have financial concerns that could delay their retirement.

In fact, many of the respondents expected to have to delay retirement into their seventies. This, again, illustrates how phased retirements could find a middle ground between an employer’s needs and those of their employees. From an employer’s perspective, it could address one of their biggest staffing concerns: losing knowledgeable, experienced employees. And from an employee’s perspective, it could provide the financial assistance necessary to feel confident approaching retirement.

Talking about your unique situation with a financial services professional can be a helpful way to determine if you will want, or need, to consider a phased retirement.


The path to success can be very different for everyone, but successful teams — in sports, in business or even your team at home — often have similar traits and abilities.

CNBC’s Elle Kaplan reviewed a five-year-long Google study on maximizing effectiveness and analyzed the results in her article, “Google found the most successful teams share these 5 traits.” 1

I thought it could be helpful to review the five characteristics of great teams she identified and then we discuss how these traits can be used to influence your retirement preparation. Google, which we all know is a worldwide leader in technology and innovation, executed the research project under the name Project Aristotle. The study produced some interesting results.

The first of the five traits discussed in the CNBC article is likely the hardest trait to achieve: Psychological Safety¹.

Psychological safety is personal, and different for each person. When people feel comfortable in their group, they’re more willing to take risks and share information or ideas without fear of being mocked or embarrassed.

When it comes to your retirement preparation, this can translate to you choosing a situation that allows you to be an equal participant in the development of your retirement strategy. Ensuring you’re on the same page with your spouse and/or financial services professional is a step in the right direction.

The next trait mentioned in the study is Dependability.

In successful teams, each member has a specific role and knows their part of the bigger picture. The entire team knows the plan and the big picture goal. This allows each member of the team to strive for a common goal.

When you think of your financial picture, think of your investments, 401(k), pension, and Social Security all as members of your team. They each have a role in your retirement. Especially when it comes to your income. What will each of them provide you on a monthly basis? Is it capable of covering your expenses? Is there a gap that needs to be addressed?

Each part of your financial life plays a role in your financial security. The team is all working toward the same goal. A concrete plan can give you the transparency needed to identify if there is any gap. Once you know what you might be missing or lacking in income, then you can take steps to address the situation.

That plan will help them deal with potential changes or fluctuations in their personal economy. It fits nicely with the next trait: Structure and Clarity¹.

Clear communication and goals are essential to successful teams. Working with your financial services professional and defining your goals can help you work toward those goals.

I believe the last two traits from the Project Aristotle study are tied together. The last two traits are Meaning¹  and Impact ¹.

Meaning can be a sense of purpose or perceiving value in the work itself. And meaning is different for each of us.

The value could be teamwork, creativity or simply financial. On the other hand, impact is more about the results of the work; the end result.

To assess how you feel about meaning and impact, I suggest asking yourself a few questions. You can start with these: What are your dreams and goals? What do you hope to do, see and achieve? What does retirement mean to you?

Financial security, supporting family, helping the team succeed, or self-expression are all great options for meaning. It’s quite likely that for many individuals’ true meaning comes in some combination of those, plus so many more possibilities. Regardless of the details or ingredients to your meaning, that meaning puts the entire retirement journey into a uniquely personal perspective.

I believe all this equates to your legacy — what you will leave behind. That doesn’t necessarily only mean money or inheritance. The time that you spend and then memories that you create are just as important as, if not more important than, your financial legacy. The members of your team (in this case, your retirement strategy) may benefit from working together.


A financial services professional can help you build a team that will work toward your goals.

Four Drawbacks that Can Sidetrack Women on the Path to Retirement

Despite being more educated and financially empowered than in past generations, many women still feel insecure when it comes to retirement strategies and their financial future.

While more and more women are responsible for handling their family finances, it can be overwhelming for anyone to weigh all of the options and make the decisions that are required when planning for retirement income and for leaving a legacy.

It’s not just women, of course, that feel insecure about their strategy for retirement. But women do face some special challenges when they are preparing for their financial futures. First, women are living longer than ever before — thanks in part to preventive healthcare becoming a larger focus for women of all ages1.

Women, like many pre-retirees, tend to have retirement strategies that don’t reflect the increase in life expectancy2. Men have that same problem, but it can be more problematic for women because with an even longer life expectancy, women face an even greater scale of retirement income shortfall.

According to the Centers for Disease Control and Prevention, women tend to live almost five years longer than men1. That’s a lot of retirement income that will be needed and if, like some women, they have not taken an active role in their retirement preparation, they may be forced to live with the financial decisions made by their husband even after he’s gone.

 Many financial services professionals have female clients who have reported facing a retirement strategy dilemma at one point in their life. It’s very common, and some of the same drawbacks plague women as they prepare for, and then live in retirement.

Let’s look at four of the most common drawbacks, and consider how a financial services professional can help you navigate them.

 1. Not understanding the source of your advice.

 It is crucial to know where you are getting your financial advice and understand the motives behind the person giving the advice. Trust and respect are important factors in deciding what professional they choose. By educating yourself on the options available, you can ensure you find a true financial professional partner in life.

 2. Failing to allocate your assets appropriately.

 One of the important factors in retirement strategy is allocating assets appropriate to risk tolerance, income needs and legacy desires — yet many people overlook changes that should be made as you near retirement age.

Strategic allocation ensures diversification based on your unique risk tolerance. Diversification is the key to risk management and is a critical component to your overall financial strategy. The simple way of putting this is: Don’t put all your eggs in one basket. It is important to note that diversification cannot guarantee a profit or protect against a loss.

 3. Failing to take advantage of stretch options, which provide a greater legacy to your loved ones.

 With the Tax Reform Act of 1986, Congress passed a law that allows multi-generational distributions for Individual Retirement Account (IRA) assets3.

Non-spousal beneficiaries must generally take distributions from their inherited IRAs, whether transferred or not, within five years after the death of the IRA owner. But an exception to this rule applies if the beneficiary elects to take distributions over his or her lifetime, often referred to as “stretching” the IRA. You can stretch IRA distributions throughout yours, your children’s and your grandchildren’s lifetimes.

  1. Failing to prepare for legacy planning.

When planning your legacy, some good questions to ask yourself include:

  • Are your beneficiary forms up to date?
  • Do you know where your important documents are located?
  • Do you have primary and contingent beneficiaries?
  • Do you know what benefits are available to you from the Social Security Administration?
  • Have you initiated important estate planning documents?
  • Does it allow the multi-generational payout?

If there is one rule more important than any other when it comes to legacy planning, it is this: Your beneficiary designation forms control how your assets are distributed, so you need to keep those forms up to date. This is true for retirement plans, annuities, life insurance, and other non-probate assets. You need to review the beneficiary designations at least every couple of years or when there is a major life event.

Everyone can benefit from avoiding the drawbacks that can sidetrack you on the path to retirement. But for women, whose life expectancies generally mean they’ll be in retirement loner than men, it’s even more important.

Contact your financial services professional to discuss how you can prepare for retirement and its many twists in turns.

1 https://www.cdc.gov/nchs/products/databriefs/db328.htm


3 https://www.investopedia.com/terms/t/taxreformact1986.asp