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Facing Retirement Challenges


If you answered money, you’re partially right.

Meeting the financial challenges of retirement requires something even more essential – a plan. You need a strategy for growing your retirement savings and turning it into income that can last a lifetime. At SG Wealth Management, we call this critical transition period your Retirement Red Zone, a time when careful planning and prudent action are essential.

Although everyone’s Retirement Red Zone is unique, there are a number of fundamental issues we all face that make the road to retirement more challenging than ever.


Living Longer

Increasing life spans create the risk you’ll outlive your savings.

Rising Costs

Inflation, healthcare costs and taxes can erode your future purchasing power.

Market Uncertainty

Market volatility and low interest rates can have a devastating impact on your retirement income.

Social Security Benefits

Most people should ask, and get answers to, six key questions.

The Challenge Of Living Longer

Your journey could last longer than you think

Since the 1950’s, life expectancies have increased by more than 10 years 1. According to estimates, if you are 65 and married, there’s a 1 in 2 chance that either you or your spouse will live to age 92.2 So how long are you going to live? Of course, there’s no way to know for sure. But today there’s a higher probability that you’ll live longer than your parents or grandparents. And if you’re a woman, that probability is even greater, so it’s important to plan accordingly to reduce the risk of outliving your retirement savings.

1 CDC/National Center for Health Statistics.

2 US Annuity 2014 Mortality Table, Society of Actuaries.

The Challenge Of Rising Costs

Keeping up with increasing expenses


Prices for basic expenses (food, housing, transportation, utilities, etc.) tend to increase over time. But most of us underestimate the impact these costs can have on our standard of living in retirement. Inflation rates have varied historically, but even relatively modest rates of inflation can diminish your purchasing power in retirement.

The chart to the right is for illustration purposes only. 3% is a hypothetical rate and actual inflation rates may fluctuate over time.


In addition to basic expenses, the cost of healthcare is one of the biggest financial challenges facing Americans today. And healthcare costs can be an even bigger concern in retirement, when health issues are more likely to arise. For women, the costs could be even higher, as they represent 70% of the residents in long- term care facilities.1

1 American association for Long-Term Care Insurance (AALTCI).

It is estimated that an average, healthy, 65-year-old couple will need $285,000 to pay for medical expenses in their lives.
Source: Fidelity Benefits Consulting, How to plan for rising health care costs, April 1,2019. Healthcare and nursing home costs may vary by state.


And then, of course, there’s the ever-present potential for tax hikes. With a soaring US national debt of over $22 trillion2 there is a good chance that taxes will increase, taking a bigger bite out of your retirement income.

2 , June, 26 2019

Income tax rates would have to double across the income spectrum to balance the federal budget.
Source: The Heritage Foundation, Federal Budget in Pictures, 2012; using data from the Congressional Budget Office

The Challenge Of Market Uncertainty

Market volatility and low interest rates

Over the last few years, the market environment has been a sobering reminder of the impact market volatility can have on retirement portfolios. Between 2008 and September 30, 2013, the S&P 500 index had 157 days with a movement of 2% or more in either direction. * This volatility has driven many investors to shift money out of the stock market and into fixed income investments.

The trouble is, when interest rates are low for an extended period it becomes far more challenging to produce the income needed in retirement. This difficult reality forces many retirees to adjust their expectations and lifestyle in retirement.

The example below illustrates how lower rates (represented here by the 5-year CD, 3-year CD and 6-month CD) can have a profound impact on income producing investments. We assume a $100,000 investment in a 5-year CD for the interest income example below.

* Yahoo Finance

Planning for Social Security Retirement Benefits

For some people, choosing the right time to file for Social Security retirement benefits appears to be straightforward. Some choose to take benefits at age 62, as soon as they become available. Some choose to take benefits at the same time they stop working. While others delay claiming benefits just to get a higher benefit payment. Unfortunately, it might not be that simple. Indeed, for many, the decision is more complicated.

Most people should ask, and get answers to, the following questions:

⦁ At what age should I file for benefits?
⦁ At what age should my spouse file for benefits?
⦁ When does it make sense to claim a spousal benefit?
⦁ How do I make sure my spouse gets the largest survivor benefit?
⦁ How do we know which of the common filing methods might be right for us?
⦁ If one of us lives a long life, how does that affect our decision?

Let us run a custom report for you that will help answer many of your pressing questions! CLICK HERE to request!

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