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Making Up for Retirement Shortfalls

| July 20, 2015
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Given the backdrop of global economic uncertainty and the increase in both life expectancy and medical costs, it is more important than ever to create a comprehensive retirement cash flow plan prior to retirement and keep it current as “life happens.” Fortunately, HCM can help you understand the probable impact of utilizing one or more of the following strategies to help your retirement nest egg last. 

Work Longer

Working longer is one of the easier solutions for those facing retirement shortfalls, allowing you to contribute to your savings for a few more years.

Reduce Spending During Accumulation Years

One of the best ways to save more is to spend less. Allow your HCM Wealth Advisor to help you set explicit goals and gain a clear understanding of your “retirement” net worth. It goes without saying that carefully managing expenses is essential to reducing your spending. Getting started early will make hitting your retirement goals much easier.

Reduce Planned Expenses in Retirement

Your retirement nest egg may last longer if certain expenses, such as home costs during retirement years, are reduced. This is an easy step, as many retirees make plans to downsize after the children are gone.

Optimize Your Asset Allocation

As you near retirement, a portfolio that is too conservative can be just as risky as one that is too aggressive. This is because inflation can overtake a conservative portfolio’s ability to produce retirement income over time. Retirement can be a 30- year prospect, long enough to consider an appropriate allocation to stocks, which – although they are more volatile – offer higher return potential over time. Your objective should be to build a portfolio around a sustainable withdrawal rate that will meet your family’s needs. HCM has tools to help with this process.

Delay Taking Social Security

One of the most common questions people ask about Social Security is when they should start taking benefits. If you’re healthy and expect to live long, waiting until age 70 to receive Social Security benefits can result in a higher payout. There are other Social Security strategies that may be beneficial in your retirement planning as well. Here is an article with more information.

If you would like to discuss some of these strategies in person, give one of our HCM Wealth Advisors a call and we can set up an appointment to go over them with you in detail.

Content in this article is not intended to be financial advice. Instead, we think of it as educational and financial education is important to us.

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