10 Ways to Avoid Outliving Your Retirement Income

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relax on the beachOne of the biggest fears that Americans, and especially baby boomers, have is running out of money before they die. The last thing we want is to become a financial burden on children and other loved ones.

No one can guarantee that we won’t run out of money. But there are steps we can take now – regardless of age – to ease our fears, reduce our dependency on volatile markets, and pursue a wealth-building strategy that runs counter to what mainstream society is telling us to do.

Here are the top 10 ways to avoid outliving your retirement income:

  1. Start planning as early as possible: It’s never too early to start planning for retirement. And planning does not mean simply putting money into a retirement account every month. Rather, you need to start building a long-term retirement strategy to ensure you get to where you want to be by the time you retire.
  2. Reduce your spending now: No matter how much money you’re earning now, and no matter how comfortable you feel spending money now, the day will come when you’re no longer earning money and you need to ensure it lasts the rest of your life. It’s important to reevaluate your expenditures and reduce spending that jeopardizes with your long-term financial security
  3. Account for factors outside your control: One common pitfall when saving for retirement is not accounting for factors outside of your control – namely, soaring healthcare costs and other types of inflation, plus an inability to know over how many years your retirement savings will need to stretch. You must factor in these considerations when planning for retirement.
  4. Assume unexpected expenditures: If we knew exactly how much we needed for every year of our retirement, we could plan accurately. Unfortunately, life happens, and we must be prepared to foot the bill. Especially as we age, we can expect to be hit with all sorts of costly medical expenses, as well as any number of natural disasters and other emergencies.
  5. Develop a true wealth-management strategy: Most Americans focus on a magic number for retirement – say, a $1 million savings goal. But that’s a mistake. With so many factors outside your financial control, you need a true wealth-management strategy that provides security from market forces, liquidity so you can access your investment when you need it most, and a hedge against inflation forces that can obliterate your spending power.
  6. Don’t put all of your eggs into Wall Street’s basket: IRAs, Roth IRAs, and 401(k)s have become such ubiquitous retirement investment products that most people think they’re the only option for saving for retirement. What they all have in common, though, is that they rely heavily on putting your hard-earned income into Wall Street’s hands. News flash: Wall Street is not looking out for you as an individual investor. Rather, Wall Street is focused on growing the market as a whole, which may put your investments into financial peril.
  7. Take out a whole life insurance policy: The foundation of a comprehensive wealth management strategy is whole life insurance. Whole life insurance is insulated from the volatility of financial markets, and it’s a secure investment because the industry is so tightly regulated. Properly structured Whole life insurance policies also have guaranteed dividend payments that provide a steady return on investment.
  8. Access the cash value of your policy: When structured correctly, the full cash value of whole life insurance becomes a liquid asset that you can access to fund other investments. In the process, you become your own bank, borrowing against your own investments without incurring any tax liabilities – and also retaining the full cash value.
  9. Invest in real estate: With the cash value of your whole life insurance policy, you can invest in real estate. Over time, you can build equity as property values appreciate. Furthermore, you can collect rental income on these properties while you wait for the optimal time to sell.
  10. Consider commodities and collectibles: Commodities range from precious metals like gold and silver to agricultural products, oil and building materials. Collectibles range from fine art to fine wine to rare coins. When you learn how these investments work and start to have fun with them, they can be a welcome alternative to the uncertainty of Wall Street financial markets.

There are so many steps you can take to avoid outliving your retirement income. You should seek to optimize your retirement savings now by advanced planning, reducing spending, considering factors outside your control, and planning for the unexpected. Next, you should develop a comprehensive wealth-management strategy that lessens your reliance on Wall Street and includes taking out a whole life insurance policy. The cash value of that policy can then be accessed to invest in real estate, commodities, collectibles and other investments that further diversify and reduce your risk.

Want to learn more about what it takes to retire successfully? Check out Preparing for Your Complete Retirement Journey

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Q: What is the importance of early retirement planning?

A: Early retirement planning is crucial for building a long-term strategy to achieve retirement goals and ensure financial stability in later years.

Q: How does reducing current spending affect retirement security?

A: Reducing current spending can significantly enhance long-term financial security by conserving resources for the time when earning potential decreases.

Q: What role does whole life insurance play in retirement planning?

A: Whole life insurance provides a secure investment insulated from market volatility and includes benefits like guaranteed dividends, contributing to a comprehensive wealth management strategy.

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