HAPPY RETIREMENT Principles that you should know

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As the wave of the baby boomers approaches retirement age, there are many of us who are wondering if we have enough money to retire happily and sustain the live style that we have been used to.

What does it really mean to retire? Does it mean you just stop working and then worry the rest of your day on how you are going to pay rent? Or does it mean that you have sufficient liquidity and assets to maintain a lifestyle to which you are accustomed?

When we see the news, the political turmoil, the pandemic, and the world changing so fast around us, we wonder if we have our assets in a safe location from a downturn in the stock market, or if the value of our cash will keep up with inflation.

There are genuine concerns of the aging population and in this video, we summarize important principles based on current trends in the financial markets that address some of these concerns that many of us share. For example:

Improvement in health care and the adoption of a healthy lifestyle means many of us will live well beyond of what our parents did, and thus it is genuine worry that we may not have sufficient money to last us long enough. In fact, many people do not even have a pension plan and rely entirely on savings, thus the possibility of outliving our money is a strong concern.

Whether we have cash savings, stock assets, bonds, 401K or any other financial instruments, they are all affected by the Stock Market volatility, and in this era of fleeting politics, pandemics, and divided national identity, this becomes a real problem that we fear and paralyzes us.

Many of us do not have a plan. What can we count on? Have we purchased or paid for a home to help us in the later years? or are we relying just on the promise of a broker that everything will just somehow magically work out? Are we HOPING or do we actually have a PLAN?

Before we continue, we would like to disclose that the contents of this video are for educational purposes only.

We are planning a series of videos on financial learning including this one about Annuities to help you energize your happy retirement.

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Next, we examine some principles that will help us create a happy and worry-free retirement plan that really means NEVER having to worry about losing money or market downturns.

Key Factors in Retirement.

Of course, we know savings and income are a factor. Without those two, we will not get where we want to go, as without them we will not be able to pay for living expense and having sufficient leftover to enjoy life in retirement.

However, there is another factor that most people do not consider when planning, one that can make a tremendous impact. We asked a leading financial service to tell us about this factor, which they call the “Happy Factor” and this is what we learned:

Many of us have played the game well. We have worked hard and saved. We have been conservative in our expenditures and created a rainy-day fund. We may even have a healthy nest egg that may allow us for niceties such as playing golf, dining out, traveling to visit friends and family, which of course we deserve after many years of work. But will these activities cause us concern? Have we won the game, just to lose it now?

The stock Market

In the opinion of many financial experts, retirees tend to have too much at risk in the stock market. Just a few years ago, in 2008, we were exposed to a huge downturn that devalued the market by 46% and many people lost money and had their dreams of a worry-free retirement, crushed. More and more we are seeing the potential of more such volatility affecting us in negative ways. In the 2020 pandemic, we saw yet another downturn, yes it has rebounded with the help of the federal reserve but will it last or will it roll over and head down again. How much of our next egg are we willing to risk? What are we going to do to avoid having to fret about our retirement with financial worries and concerns?

We see that many people who ignored this advice, had to extend their working years, delaying their retirement or having to rejoin the labor force in less than ideal conditions, often having to tightly control their expenditures and their dreams of travel and enjoyment.

More and more financial experts, who are truly invested in the fiduciary comfort of their retiree customers, are advising them to move their funds to more protected investment strategies. While each person’s amount is different, we all share a risk limit, of how much we are willing to lose in a market downturn. What is yours? Is it true that the best or only safe place for your retirement funds is the stock market?

In fact, we share the opinion that the stock market is like a casino game, with consistent volatility that makes it very difficult if not impossible to predict when to get out safely or when to press your luck for future gains. Now were not completely against the stock market, its great for a portion of your money, but most retirees have far too much in the stock market and a sustained downturn could have devastating effects on the happiness of their retirement.

A second look at other options

Some financial experts are suggesting taking a look at Annuities, but there is so much misinformation and confusion about them, that is easy to get discouraged in having an intelligent analysis or conversation.

Studies have shown that people who are surrounded by friends and family and also have a guaranteed income are much happier that those that do not. Oddly enough, individuals with a guaranteed income also live longer. Why is that? One theory is that the worry-free coverage of living expenses, reduces stress which in turn eliminates potential illnesses brought about by stress and worry.

So now we know that the worry of running out of money is the number one concern for retiree, regardless of the cause: poor market conditions, low interest rates, not enough savings, or a combination.

While in the past retirees could count on Social Security and employer pensions, with the going away party and the gold watch for many years of service, pension plans are very uncommon now days, leaving the responsibility of savings up to the employee, and social security income is a big portion of income for retires, it only makes up about 40 percent of the average wage earners pre-retirement income.

The Brutal Truth facing retirees

Here are the top five concerns in the mind of retirees:

• No pension, and concerns about running out of money

• Stock Market volatility and external economic forces affecting retirement

• Disappointment in investment performance

• Rising inflation, taxes, and future health care costs

• Tired and fed up with conflicting investment advice.

So, what are some folks doing about this? Many are turning to a careful examination on Guaranteed Lifetime Income strategies, which covers basic living expenses through retirement, while keeping the money secure from market downturns.

Rather than obsessing with monitoring the Stock Market performance, smart investors are living life to the fullest free of concerns having achieved what is knowns as the “Happy Factor”

Many of the big insurance companies are offering “modern” annuities which can provide you with a guaranteed lifetime income option. Just a quick search will show companies such as MetLife, TIAA, Prudential, Transamerica, Pacific Life, Fidelity, and many others.

Some even include an option for joint income recipient so you that your spouse or other individual can receive the income.

Filling in the Income Gap

While there are many strategies and ways of converting funds into annuities, the first step is understanding the so-called income gap. That is the amount of money that we do not have after considering other sources of income such as Social Security.

Here is a typical scenario to help us understand better the income gap. Let’s say that you will want $7,000 monthly income because you believe that is sufficient to cover your core living expenses and have sufficient for other expenses. Lets also assume your Social Security income is about $2000 a month, your spouse Social Security is about $1,000 and there is a pension that gives you about $2000 a month. Thus, you need an additional $2000 a month to meet your goal of $7000. The $2000 then is the INCOME GAP.

Here is where the financial experts, the math theorist and experience come in to play. An Annuity maybe the best investment vehicle to fill that gap. We already know it is not Stocks or Bonds, even though they could be good, those two do not provide guaranteed income, and income represents peace of mind. You want that guaranteed $7,000 every month, no matter what, so you can make the decision on how to spend it.

Does one size fit all?

Of course not, and this is why you need to have any financial strategies, such as Annuities, custom fit to your needs and requirements.

There are some annuities that are better than others, some that provide income now, some that provide income later, and then there are some that are just protected growth with no lifetime income.

This of course would lead us to seek an expert to look at our situation, in the best objective and fiduciary form.

Someone that is experienced and up to date in the latest strategies, risk, and demonstrate high ethics and trust.

We at Morrongo TV have begun creating a series of financial educational series, so go ahead and subscribe and hit the notification bell so that you will know when we post a new video.

Stay tuned as the next video is starting, but before the next video starts, allow us a brief disclaimer.

We have received permission from Terry Heys to use content from his website annuitygator.com to create this video. It is intended to be used for general informational purposes only and should not be construed as accounting, legal, tax recommendations or specific investment advice. We reiterate, this is educational only. The ideas and strategies expressed in this video should never be used without first assessing your own personal financial situation or without consulting a financial professional.

Morrongo TV. Motivation, Inspiration, Fun!

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