Zero interest rates is not a good place to be for retirees. We are in uncharted waters that we have never encountered before in the history of this nation. Savings rates for most are abysmal. Many retirees will end up working during their retirement years. Here are some things you can do to better prepare.
1) Save More And Spend Less: This is the only way to ensure you will be adequately prepared for retirement. It ain’t sexy, or fun, but it will absolutely work.
3) RISK does NOT equal return. The further the markets rise, the bigger the correction will be. RISK = How much you will lose when you are wrong, and you will be wrong more often than you think.
4) Don’t Be House Rich. A paid-off house is great, but if you are going into retirement house rich and cash poor, you will be in trouble. You don’t pay off your house UNTIL your retirement savings are fully in place and secure.
5) Have A Huge Wad. Going into retirement have a large cash cushion. You do not want to be forced to draw OUT of a pool of investments during years where the market is declining. This compounds the losses in the portfolio and destroys capital which cannot be replaced.
6) Plan for the worst. You should want a happy and secure retirement – so plan for the worst. If you are banking solely on Social Security and pension plans, what would happen if the pension was cut? Corporate bankruptcies happen all the time and to companies that most never expected. By planning for the worst, anything other outcome means you are in great shape.
7) Consider immediate annuities. Even in a zero interest rate environment, immediate annuities can be a good option.
8) If possible, delay taking Social Security until age 70. It is the best annuity out there and goes up with inflation, and by waiting your base for the annual adjustment of inflation is higher. By waiting until age 70, your breakeven rate will be in your early eighties, so if you expect to live longer, waiting is best.
I replied: #8 I took Social Security at 62 because I wanted to GET Some before I Died... I Just Witnessed a Man at Work Die from a Heart Attack and HE HAD THE SAME LIFESTYLE AS I DID... Office Worker, Smoker, Overweight, Massive Coffee Drinker... Hamburger Eater... ETC... I'm Glad I Did Take SS at 62... Because It Allowed me to Quit work and Live a Healthy Life.
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