Money & Career
Financial Habits of Successful Retirees
9/1/2019 1:00:00 PM

Americans are concerned about the odds they will enjoy a secure retirement, and those concerns flow across generational lines. Research by the nonprofit Transamerica Center for Retirement Studies reveals that 45 percent of Baby Boomers expect to experience a reduced standard of living in retirement. Meanwhile, 83 percent of Generation X workers anticipate they will have a harder time achieving financial security than their parents did, and only 18 percent of Millennials foresee a comfortable retirement.

"Unfortunately, those results aren’t surprising,” says Chris Craven with New York Life. "People have real concerns about outliving their money.” 

Much of this concern stems from several aspects related to a traditional retirement that have changed over the years. People are living longer, which means they either need to save more money or find ways to make what they do save last. Pensions are a thing of the past for most Americans, and Social Security faces an uncertain future.

Instead of worrying, those planning for retirement should focus on those things which are within their power to control. Successful retirees often exhibit the following three habits:

They live with a sense of purpose. Instead of resigning oneself to the recliner, successful retirees strive to stay active, healthy, and happy in every aspect of their lives, from day to day activities to finances. If you have goals for your retirement, you’re also more likely to plan for them financially. 

They retire based on their financial assets as well as their age. Traditionally, when people think about retirement, they pick a target age rather than a target amount in their portfolio. But that may not be the right approach. Craven says age and assets go hand in hand. Many of his clients express a desire to retire early, but the greatest unknown is the cost of health insurance. "If retirees cannot take their work-related health insurance with them and can’t afford over $2000 a month per couple for health insurance, they are forced to work until age 65.” While you might have a certain age in mind, it can be worthwhile to create a retirement plan that’s based on your finances to improve your odds of having enough money to last the rest of your life.

They know how to manage risks. Craven says anyone can retire – it just depends on the standard of living you desire during retirement. "I try to have my clients be debt free by retirement. And I encourage the age/allocation rule of thumb; an individual should strive to have his age (as a percentage) in fixed income and the difference in equities or stocks. For example, at age 60, a person should have 60% of his or her income from fixed income generating a dividend each month and 40% should be in equities to hedge inflation.

Retirement should be about enjoying yourself after decades of employment, not counting pennies to survive. Understand that there are steps you can take and habits you can form now that will boost your financial security down the road.

For more information, contact Chris Craven at New York Life, 3105 Lake St, Lake Charles, 337-475-6226. 

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