The Four Phases Of Retirement

While there’s nothing wrong with dreaming big about retirement, it’s important to remember that how you think about retirement is likely to change over time. No matter how your circumstances change, you’re likely to have four unique stages of retirement.

Phase one

The first phase is the pre-retirement phase. This phase kicks off roughly a decade before you punch the time clock for the final time. While financial services professionals generally urge you to begin saving for retirement as soon as you get your first paycheck, that money will typically be set aside and left alone to hopefully grow. However, once you roll into your 50s and your pre-retirement clock begins ticking, it’s time to actively start planning out your preferred retirement.

Perhaps the best first step in the pre-retirement phase is to simply define what your goals are and what you want your post-work lifestyle to be. If you have a spouse or partner, make sure you sit down together to see where your goals line up and how you can compromise on some of the areas where your goals differ.

Phase two

Phase two is the early years of your retirement. For a lot of folks, this phase tends to be expensive because your health and energy are both likely to be good. And when you combine that with your general excitement at finally being retired, well, that probably means lots of travel and other adventures.

But travel and adventures cost money. And, if you aren’t careful, that pot of saved money you worked so hard for can begin to dwindle faster than you anticipated. To that end, a part-time job after your retirement may be a solution. The extra money you bring in could help you fund some of those adventures, but it’s more than that. It’s getting out of the house and engaging with the world.

And remember, you don’t have to just take any old job. You could work part-time at the local zoo or an arts organization. Phase two is also a good time to consider your current living arrangements. About 40% of retirees move after they stop working. Is it time to downsize? Do you have family you want to be closer to? This is a good point to consider some of those questions.

Phase three

Phase three is your middle retirement and is often the most expensive phase. This phase begins roughly 10 years into retirement, at which point you’re likely traveling less and spending more time around home. This is also the phase when healthcare expenses begin to tick up as you require more medical appointments and treatment. Many folks in retirement’s third stage also find themselves with medical expenses like equipment and medically necessary upgrades to their homes. Some of those additional medical services and equipment can come with plenty of sticker shock and many of them fall outside the scope of Medicare.

Phase four

The fourth phase of retirement is your later years. During this stage, it’s very possible that healthcare will be your most significant expense. In phase four, long-term care insurance may help you — and your money — withstand the financial tidal wave that comes with things like nursing homes, assisted living, and home healthcare services. And again, you shouldn’t plan to use Medicare for these types of services. In some cases, Medicare may help modestly with some of those services and in other cases Medicare won’t help at all.


Taxes in Retirement

When it comes to retirement planning, it’s only natural to be consumed with big picture items like finding the ideal community, whether to stay in your current home or downsize, and how much travel you’ll be able to do. And those are all great and very important things to think about. But a successful retirement often boils down to some of the more nitty-gritty details. And perhaps nothing is more nitty-gritty than having a strong tax strategy to see you through retirement.

Traditional IRAs and 401(k)s

Let’s first look at traditional IRAs and 401(k)s, which are tax-deferred retirement accounts that many Americans rely on during retirement. Money that you dedicate to these accounts typically slashes your current taxable income which thereby trims your tax tab in a given year. Savings, dividends, and investment gains in these accounts grows on a tax-deferred basis.

But those deferments don’t last forever. Once you’re officially retired and begin taking withdrawals, you’ll need to pay taxes on any gains and your pre-tax or deductible contributions. And it’s important to also bear in mind that these accounts have required minimum distributions, or RMDs, which is the point in time when you have to begin taking money out.

When do those RMDs kick in?

At present, RMDs begin at age 72 for a traditional 401(k) or IRA. If you work past your 72nd birthday you may qualify to delay an RMD from your employer’s 401(k) as long as you don’t own more than five percent of the company you work for.

Your withdrawals from your traditional 401(k) or IRA are taxed at your standard income tax rate.

Next, let’s look at Roth IRAs. First things first, they come with one significant long-term tax perk: While contributions to a Roth IRA aren’t tax deductible, your future withdrawals may not be taxed. But to enjoy those potentially tax-free withdrawals, you must have held your Roth IRA account for a minimum of five years. And while you can take out the amount you contributed at any time, tax-free, in most cases you must be at least 59 ½ to take withdrawals without a 10% early withdrawal penalty.

Social Security is yet another area where taxes are lurking after you retire. Until 1983, Social Security benefits were tax-free for every American, regardless of income. And while Social Security benefits still aren’t taxed for a sizeable chunk of the population, others are hit fairly hard. If you have provisional income, you may have to pony up federal income tax on as much as 85% of your benefits. To figure out your provisional income, begin with your adjusted gross income and then add 50% of your Social Security benefit and all of your tax-exempt interest. If your provisional income is less than $25,000 for individual filers or $32,000 for joint filers, you won’t have to pay taxes on your Social Security. However, if your provisional income falls between $25,000 and $34,000 for individual filers or $32,000 and $44,000 for joint filers, then as much as 50% of your benefit is subject to taxation. Finally, if your provisional income is north of $34,000 for individual filers and $44,000 for joint filers, then as much as a whopping 85% of your benefit is considered taxable.

What about pensions? The majority of pensions are funded using pre-tax dollars, which means the full value of your pension income would become taxable once you receive the money. Payments from both private and government pensions are generally taxable at your ordinary income tax rate. This is for informational use only and not to be considered advice. Please see a qualified tax professional.





Over-Looked Tax Breaks For Retirees

Preparing for taxes in retirement is one financial strategy move you can make to help keep more money in your pocket. And, to that end, there are several often-over-looked tax breaks that cater to retirees that you should be aware of.


The first potentially over-looked tax break to note is the spousal IRA contribution.


In most cases, you have to earn income to kick money into an IRA. But if you’re married and your spouse is still working, they can often contribute as much as $7,000 per year to a traditional or Roth IRA that you own.


But don’t forget the year’s total combined contributions to your IRA or your spouse’s IRA can’t be greater than $13,000 if only one of you is 50 or older or $14,000 if both of you are at least 50.



The next potentially valuable deduction is Medicare premiums. If you become self-employed after you retire – something that’s becoming more common – you may deduct the premiums you pay for Medicare Parts B and D as well as the cost of Medigap policies or Medicare Advantage plans.


One note on this one: You aren’t allowed to take this deduction if you’re still eligible for employer-subsidized health plan offered either by your employer or your spouse’s employer.



Giving money to charity is another potentially good way for retirees to reduce their tax burden a bit. Once you reach 70 ½, you can contribute to your favorite charities in a tax-friendly manner without having to deal with itemization.


The qualified charitable distribution, or QCD, allows you to transfer as much as $100,000 every year from a traditional IRA directly to a charity. If you’re married, your spouse can add an additional $100,000 from their IRA. The transfer isn’t considered taxable income and it counts toward your RMD.


Just note that you can’t also claim the transfer as a charitable deduction on your Schedule A.



While it’s true that not many folks need to worry about the federal estate tax, given that most people will be able to pass on a little more than $12 million to their heirs in 2022. Oh, and in 2022, married couples will be able to pass on $24 million. Not bad, right?


However, if there’s a chance the estate tax may become something you have to strategize for, you’ll want to utilize the annual gift tax exclusion. With this rule in 2022, you can give as much as $16,000 every year to any number of people without facing a gift tax. Your spouse can give that same person an additional $16,000, making the tax-free gift $32,000.



You should also be aware of the potential for tax-free profit off the sale of a vacation home. Qualifying for this one is actually fairly simple. The home you’re selling must be your principal residence and you must have both owned and lived in it for a minimum of two of the last five years prior to the sale. But there is in fact a way to grab some tax-free profit from selling a vacation home.


For example, let’s say you sell your family homestead and utilize the break that makes as much as $250,000, or $500,000 if you’re married and filing jointly, of the profit tax-free. From there you move into the vacation home you’ve owned for many years. As long as that vacation home is your principal residence for a minimum of two years, some of the profit of an eventual sale will be tax-free.


These are just some of the potential tax breaks that are available to retirees, so be sure to work with a financial services professional to devise a retirement tax strategy that’s tailored to your needs.



Following the Inflation Debate

During the 12 months ending in June 2021, consumer prices shot up 5.4%, the highest inflation rate since 2008.¹

The annual increase in the Consumer Price Index for All Urban Consumers (CPI-U) — often called headline inflation — was due in part to the “base effect.” This statistical term means the 12-month comparison was based on an unusual low point for prices in the second quarter of 2020, when consumer demand and inflation dropped after the onset of the pandemic. However, some obvious inflationary pressures entered the picture in the first half of 2021. As vaccination rates climbed, pent-up consumer demand for goods and services was unleashed, fueled by stimulus payments and healthy savings accounts built by those with little opportunity to spend their earnings. Many businesses that shut down or cut back when the economy was closed could not ramp up quickly enough to meet surging demand. Supply-chain bottlenecks, along with higher costs for raw materials, fuel, and labor, resulted in some troubling price spikes.²

CPI-U measures the price of a fixed market basket of goods and services. As such, it is a good measure of the prices consumers pay if they buy the same items over time, but it does not reflect changes in consumer behavior and can be unduly influenced by extreme increases in one or more categories. In June 2021, for example, used-car prices increased 10.5% from the previous month and 45.2% year-over-year, accounting for more than one-third of the increase in CPI. Core CPI, which strips out volatile food and energy prices, rose 4.5% year-over-year.³

In setting economic policy, the Federal Reserve prefers a different inflation measure called the Personal Consumption Expenditures (PCE) Price Index, which is even broader than the CPI and adjusts for changes in consumer behavior — i.e., when consumers shift to purchase a different item because the preferred item is too expensive. More specifically, the Fed looks at core PCE, which rose 3.5% through the 12 months ending in June 2021.⁴

Competing Viewpoints The perspective held by many economic policymakers, including Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, was that the spring rise in inflation was due primarily to base effects and temporary supply-and-demand mismatches, so the impact would be mostly “transitory.”⁵

Regardless, some prices won’t fall back to their former levels once they have risen, and even short-lived bursts of inflation can be painful for consumers. Some economists fear that inflation may last longer, with more serious consequences, and could become difficult to control. This camp believes that loose monetary policies by the central bank and trillions of dollars in government stimulus have pumped an excess supply of money into the economy. In this scenario, a booming economy and persistent and/or substantial inflation could result in a self-reinforcing feedback loop in which businesses, faced with less competition and expecting higher costs in the future, raise their prices preemptively, prompting workers to demand higher wages.⁶

Until recently, inflation had consistently lagged the Fed’s 2% target, which it considers a healthy rate for a growing economy, for more than a decade. In August 2020, the Federal Open Market Committee (FOMC) announced that it would allow inflation to rise moderately above 2% for some time in order to create a 2% average rate over the longer term. This signaled that economists anticipated short-term price swings and assured investors that Fed officials would not overreact by raising interest rates before the economy has fully healed.⁷

In mid-June 2021, the FOMC projected core PCE inflation to be 3.0% in 2021 and 2.1% in 2022. The benchmark federal funds range was expect-ed to remain at 0.0% to 0.25% until 2023.⁸

However, Fed officials have also said they are watching the data closely and could raise interest rates sooner, if needed, to cool the economy and curb inflation. Projections are based on current conditions, are subject to change, and may not come to pass

1, 3)

You Can Be Both Frugal and Happy in Retirement

Frugal. It’s a word that some people wear like a badge of honor, and one that others dread. In fact, when building a retirement strategy, some people are working to avoid a retirement that requires them to be frugal.


But here’s a question that means something to a lot of people: Why not both? Retirement is a reward for a lifetime of hard work, diligent planning, and some sacrifice, and you should want to enjoy it. But being frugal doesn’t mean you have to go without, and it certainly doesn’t mean your retirement has to be constrained. In fact, it’s possible that embracing frugality may make your retirement even more fun and full of potential.


But being frugal doesn’t mean you have to go without, and it certainly doesn’t mean your retirement has to be constrained. In fact, it’s possible that embracing frugality may make your retirement even more fun and full of potential.


Here are some tips from a recent article on how you can do both.1 First, it can help to define your preferred lifestyle. A good place to start is with your home. Are you going to stay put in the home you raised your children in? Or is it time to downsize to a condo or single-floor townhome?


Smaller homes require less upkeep and maintenance, which keeps more cash in your wallet. And by necessity, downsizing means you’re going to have to get rid of some of your stuff. While you might have to simply donate most of it, you may be able to sell some of it. Earning a few extra bucks here and there may make you frugal, and it may also make you happy.


Here’s another tip: If you and your spouse or partner are both retired but you each still have your own car, consider selling one of them. You’ll not only make some money off the top, but you’ll also enjoy savings with insurance, maintenance, and gas. If you’ll each need the car for solo activities, work out a schedule that keeps everyone on the same page.


Another way to take care of your retirement budget is to take care of yourself. Stay up to date on vaccinations and your annual flu shot. Exercise regularly, whether it’s a long evening walk through the neighborhood or something more strenuous like pickleball or a senior softball league. A healthy body may mean you are able to keep more of your budget away from healthcare costs, making you frugal and smart.


Finally, having plenty of fun is an essential part of retirement. Like we said earlier, you’ve worked too hard to get to retirement only to find yourself sitting on the couch, day after day, without anything to do because you don’t have the money.


But being frugal here can help, too. If your retirement is going to include plenty of golf, day trips, or other out-of-the-house activities, why not ditch cable? It’s expensive enough that if you aren’t using it a lot it’s probably not worth it. Trade cable for Netflix or Hulu, both of which provide endless hours of entertainment for a fraction of the cost of cable.


Lots of museums, concert venues, theaters, and other arts establishments offer generous senior discounts. Another option is to volunteer as an usher at your favorite venue. That way you’re getting out of the house, having some fun, and seeing a show for free.


Being frugal doesn’t mean you can’t have fun. It just means you’re making some decisions that take you closer to the retirement of your dreams.



Tips for Managing an Inheritance

As the beneficiary of an inheritance, you are most likely to be faced with making many important decisions during an emotional time. Short of meeting any required tax or legal deadlines, don’t make any hasty decisions concerning your inheritance.


Identify a Team of Trusted Professionals

Tax laws and requirements can be complicated. Consult with professionals who are familiar with assets that transfer at death. These professionals may include an attorney, an accountant, and a financial and/ or insurance professional.


Be Aware of the Tax Consequences

Generally, you probably will not owe income tax on assets you inherit. However, your income tax liability may eventu­ally increase. Any income that is generated by inherited assets may be subject to income tax, and if those assets produce a substantial amount of income, your tax bracket may increase. This is particularly true if you receive distributions from a tax-qualified retirement plan such as a 401(k) or an IRA. You may need to re-evaluate your income tax withholding or begin paying estimated tax. You also may need to consider the amount of potential transfer (estate) taxes that your estate may owe, due to the increase in the size of your estate after factoring in your inheritance. You may need to consider ways to help reduce these potential taxes.


How You Inherit Assets Makes a Difference

Your inheritance may be received through a trust or you may inherit assets outright. When you inherit through a trust, you’ll receive distributions according to the terms of the trust. You may not have total control over your inheritance as you would if you inherited the assets outright.


Familiarize yourself with the trust document and the terms under which you are to receive trust distributions. You will have to communicate with the trustee of the trust, who is responsible for the administration of the trust and the distribu­tion of assets according to the terms of the trust.


Even if you’re used to handling your own finances, receiving a significant inheritance may promote spending without planning. Although you may want to quit your job, or buy a car, a house, or luxury items, this may not be in your best interest. Consider your future needs, as well, if you want your wealth to last. It’s a good idea to wait at least a few months after inheriting money to formulate a financial plan. You’ll want to consider your current lifestyle and your future goals, formulate a financial strategy to meet those goals, and determine how taxes may reduce your estate.


Develop a Financial Plan

Once you have determined the value and type of assets you will inherit, consider how those assets will fit into your fi­nancial plan. For example, in the short term, you may want to pay off consumer debt such as high-interest loans or credit cards. Your long-term planning needs and goals may be more complex. You may want to fund your child’s college educa­tion, put more money into a retirement account, invest, plan to help reduce taxes, or travel.


Evaluate Your Insurance Needs

Depending on the type of assets you inherit, your insurance needs may need to be adjusted. For instance, if you inherit valuable personal property, you may need to adjust your property and casualty insurance coverage. Your additional wealth from your inheritance means you probably have more to lose in the event of a lawsuit. You may want to purchase an umbrella liability policy that can help protect you against actual loss, large judgments, and the cost of legal representation. You may also need to recalculate the amount of life insurance you need because of your inheritance. The cost and avail­ability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased.


Evaluate Your Estate Plan

Depending on the value of your inheritance, it may be appropriate to re-evaluate your estate plan. Estate planning involves conserving your money and putting it to work so that it best fulfills your goals. It also means helping reduce your exposure to potential taxes and creating a comfortable financial future for your family and other intended beneficiaries.

Some things you should consider are to whom your estate will be distributed, whether the beneficiary(ies) of your estate are capable of managing the inheritance on their own, and how you can best shield your estate from estate taxes. If you have minor children, you may want to protect them from asset mismanagement by nominating an appropriate guardian or setting up a trust for them. If you have a will, your inheritance may make it necessary to make significant changes to that document, or you may want to make an entirely new will or trust. There are costs and ongoing expenses associated with the creation and maintenance of trusts and wills. Consult with an estate planning attorney for proper guidance.


To expand on these topics or to discuss any of our investment portfolios, please do not hesitate to reach out to us at 775-674-2222.

Pension or Lump Sum: Which Should You Choose?

Traditional pensions, which promise lifetime income payments in retirement, have become less common in the private sector, with only about 10% of workers currently participating in a traditional pension plan. However, pensions are still widely offered in federal, state and local government employment, and 61% of workers expect a pension to be a major or minor source of retirement income.1

About half of pension plan participants can choose to take their money in a lump sum when they retire.2 In addition, companies may offer pension buyouts to vested former employees who are working elsewhere, and even to retirees who are already receiving pension payments.

Only 29% of women said they would be able to cover their basic necessities if they found themselves out of work for an extended period, compared with 55% of men. And more than half of millenials and Gen Xers and 35% of baby boomers said they would likely use their retirement funds for something other than retirement, with most noting it would be for an unexpected expense or medical bill.1

Although tapping your retirement savings can help you get through a crisis, it can hinder your ability to afford a comfortable retirement. Having a plan to guard your financial wellness throughout your working years can help you avoid putting your retirement at risk.


What Is Financial Wellness?

The Consumer Financial Protection Bureau (CFPB) defines financial well-being as:2

  1. Having control over day-to-day and month-to-month finances. In order to achieve this, your expenses need to be lower than your income.
  2. Maintaining the capacity to absorb a financial shock. This typically refers to having adequate emergency savings and insurance.
  3. Being on track to meet financial goals, meaning you have either a formal or informal plan to meet your goals and you are actively pursuing them.
  4. Having the financial freedom to make choices that allow you to enjoy life, such as a splurge vacation.


The CFPB has identified several key factors that contribute to an individual’s ability to achieve financial well-being. Among them are (1) having the skills needed to find, process, and use relevant financial information when it’s needed; and (2) exhibiting day-to-day financial behaviors and saving habits.


Assistance Is Available

Many employers have begun offering financial wellness benefits over the past decade. These programs have evolved from a focus on basic retirement readiness to those addressing broader financial challenges such as health-case costs, general finance and budgeting, and credit/debt management.3

If you have access to work-based financial wellness benefits, be sure to take time and explore all that is offered. The education and services can provide valuable information and help you build the skills to make sound decisions in challenging circumstances.

In addition, a financial professional can become a trusted coach throughout your life. A qualified financial professional can provide an objective third-party view during tough times, while helping you anticipate and manage challenges and risks and, most important, stay on course toward a comfortable retirement.



1) PxC, May 2020

2) Consumer Financial Protection Bureau, January 2015

3) Employee Benefit Research Institute, October 2020

Don’t Let a Disaster Keep the Lights Off Forever

In the fall of 2019, wildfires fueled by high winds erupted in parts of Northern and Southern California, threatening structures in multiple communities. Wildfires have long been a concern in this sunny and dry state, but in a recent twist, millions more residents and businesses were impacted when public utilities cut off power to help prevent downed power lines from sparking fires.1


Small businesses can be hit especially hard when extreme weather or other unforeseen events result in major damage and/or force temporary closures. In fact, nearly 40% of small businesses never reopen following a disaster.2


Check Your Coverage

A business owners policy (BOP) is a package that typically combines property insurance, business interruption insurance, and liability protection (up to policy limits). Property insurance helps protect a company’s buildings, equipment, and contents against a specific list of covered perils.


Business interruption insurance helps cover lost income and operating expenses that may continue while a business is closed because of a disaster. It also helps cover relocation and advertising costs so a business can operate from a temporary site. This coverage generally kicks in after a 48- to 72-hour waiting period under three sets of circumstances:


  1. There is physical damage to the premises that forces your business to close.
  2. There is physical damage to other properties (caused by a covered peril) that prevents customers and employees from reaching your location.
  3. Your property is inaccessible because the government shut down the area due to widespread damage caused by a covered peril.


Be Aware of Exclusions

A business that is forced to shut down due to a power outage may not be covered, unless an optional endorsement (or rider) for “off-premises service interruption” is purchased at an additional cost. Earthquakes are also typically excluded from standard BOPs, as is flood damage. However, a separate flood policy may be purchased from the government’s National Flood Insurance Program or some private insurers.


Be Ready to Recover

Insurers will use your financial records to compare the income generated by the business before and after the disaster, so good documentation may speed up the claims process. Make sure to keep an accurate business inventory and take photos of the premises and all your business property. Store these and other financial records online so they can be accessed from a temporary location, if needed.


1) The New York Times, October 31, 2019

2) Federal Emergency Management Agency, 2019

Retirement Advice for Those Nowhere Near Retirement

It’s valuable to share insights and information with everyone who is on their journey to retirement — but it can be easy to focus more on those who are closer to retirement instead of earlier in their careers.

So, here’s a look at some financial advice for younger workers. It’s especially valuable to help younger people avoid some of the financial mistakes that some of their elders made on their own financial journeys.

For many people, thinking back to their younger years and the financial decisions they made then is about enough to make them try to invent a time machine. Until time travel comes around, good old-fashioned education is the next best thing. A recent article1 does a great job of providing some of those tips.

The first piece of advice is to learn self-control. When we’re kids, most of us learn self-control in terms of when we talk in class, how many cookies we can eat when they first come out of the oven, and when we go to bed. But it’s just as important to learn financial self-control.

Self-control is even more important when we start to work full-time and make more money than we ever had previously. When we get older and are making a regular salary, we have to learn instant gratification can get us in trouble if we start buying whatever we want with credit cards.

Saving up for the latest PlayStation, rather than putting it on plastic, is going to be so helpful in the long run. Remember, if putting gadgets, jeans, and sushi on credit cards becomes a habit, you could end up paying for those things for many years into the future.

The article does note, of course, that credit cards are a financial tool most people have to use, at least from time to time.1 And you can also be strategic about how you use them. For example, select a card that has good and achievable rewards, perhaps frequent flyer miles or cash back.

Then, always pay your balance in full when the bill hits in your inbox. Also, don’t carry more cards than you can keep track of or pay off each month.

Not relying too heavily on credit cards is such a valuable financial life lesson. Credit cards are valuable tools for emergency situations and can also help you build credit, but it’s so crucial to not to abuse them.

The next thing that benefits young people on their journey to retirement is to know where their money is going. It sounds like a simple thing, but it’s essential. If you stop every morning on the way to work for a bagel or coffee you might not really notice the daily expense. In a way, your mind can play tricks on you. Every morning when you’re in line for your coffee and bagel, you tell yourself, “Hey, it’s only $6.” But your mind isn’t factoring yesterday’s $6 and tomorrow’s $6.

Finally, no matter where you are in life or on your journey to retirement, it’s important to have an emergency fund.1 With factors including credit card debt, student loan debt, an entry-level salary, it can be difficult to build an emergency fund. But it’s still important to save money, even if it’s only a few bucks.

The decisions you make when you’re young can have a lasting impact on your retirement strategy. By starting to make good decisions early on, you’ll position yourself well for everything that’s yet to come on your journey.


How To Get Over Retirement Fears

As it’s depicted in popular culture and advertising, looking ahead to retirement is a time of great excitement and optimism. After all, if you’re in your 60s, you’ve likely been going to work every day for 40 years or more. So, retirement means you can spend your time doing the things you’ve always wanted to do.


While that depiction of retirement is in many ways true, it’s also true that those final years and months before retirement can be a source of anxiety for many people. The ads tell us they’re living the good life, but they don’t show how much sweat, work, and worry went into reaching that picture-perfect retirement.

Getting yourself to the retirement you’ve always wanted does take a lot of work and there are going to be moments of doubt and worry. But here’s the thing: Doubt and worry are both perfectly natural. Here are a few of the common fears that were highlighted in a recent article.1

The first common financial retirement fear is simply running out of money. Now, on the surface, that sounds obvious, and to a degree it is. But it’s not easy to determine how much money you’re likely to need in retirement with any real certainty.

One good way to address this fear is to work with an experienced financial services professional who can calmly and confidently address your concerns and questions. A financial services professional may be well positioned to help you add more certainty to determining how much money you’ll likely need once you’ve left the workforce.

In addition, a software program can help you make calculations and show you how much you need to be saving as you progress toward retirement. Perhaps most importantly, a software program may help you find places you can comfortably reduce your expenses after retirement to make it more likely that your money sees you through.

A second fear that you can overcome on your journey is the fear of inflation cutting into your nest egg. It’s true that because of inflation the money you’ve saved for retirement doesn’t have as much purchasing power.1 And if inflation were to go up rapidly, for whatever reason, it could imperil your preferred retirement lifestyle. Those changes could be small, like not being able to eat out or travel as often, or they could be more significant, depending on how much you have saved.

Finally, concerns about high healthcare costs are very common. It’s no revelation to say that healthcare is expensive, and there’s no reason to believe that it won’t just keep getting more expensive. So that leaves a lot of near-retirees sweating the details of their own coverage. But there are things you can do to help you prepare. One option may be opening a health savings account, which is more commonly referred to as an HSA. Not only will this kind of account help you cover medical costs, but it may also provide general tax savings.

You should note, however, that once you turn 65 and enroll in Medicare, you’ll no longer be able to fund an HSA.1

You want the months and years leading into retirement to be a time of excitement, not a time of worry. Working with a financial services professional to help you identify ways to build on your retirement strategy may help.