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Source: Data from the Centers for Disease Control and Prevention<\/em><\/strong>\n
\n<\/a>A 65-year-old American\u2019s average life expectancy is more than 84 years according to the Centers for Disease Control and Prevention\u00a0. Moreover, a life expectancy figure is only an average, there is still a number of people living beyond this expectancy.\u00a0According to the Social Security Administration, around one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age\u00a095.<\/p>\n
On top of that, traditional retirement income sources (from the government and employers) are laden with potential constraints.\u00a0According to a 2014 Gallup poll, less than 21% of workers were expecting a steady stream of pension from their former employer in retirement.\u00a0As for Social Security, there is a possibility that funds will be depleted in 2034, per the latest projections by the Social Security Administration.\u00a0Longer life expectancies could potentially add to these challenges.<\/p>\n
What\u2019s more, people often face the biggest expenses with healthcare, kids\u2019 education, and unforeseen life changes when they\u2019re not working. And, who\u2019s to say these won\u2019t become more expensive over time?<\/p>\n
Sure, these concerns are real. But, can a longer lifespan actually cause you to outlive your nest egg? Not if you have an effective retirement plan.<\/p>\n
Does Living Longer Make Your Portfolio Vulnerable to More Uncertainty?\u00a0<\/strong><\/p>\n Let us get one thing straight: rising longevities should not require ruthless or drastic compromises to your living standards when you approach retirement. Instead, what\u2019s needed is a financial discipline that can take care of your changing needs with age without losing sight of your long-term financial goals.<\/p>\n The first step towards achieving that discipline is to save. By putting money regularly into your savings\/investment pot, you won\u2019t be pressured into making painful sacrifices to your lifestyle when you\u2019re not working.<\/p>\n Having said that, we understand the challenges of building a nest egg solid enough to support a longer lifespan against potential uncertainties. There could be changes in policies, taxes, inflation rates, market volatility and your health condition – factors that may not always be as simple for you to foresee for long time horizons.<\/p>\n That\u2019s why an effective wealth management plan should have the flexibility to strategize investment positions per changing conditions. This is something that we, at Zacks Investment Management, strongly emphasize. Instead of pigeonholing a nest egg under a single strategy, we provide a customized analysis for every client, then use our independent market research and tools we\u2019ve developed to design a customized investment portfolio based on each individuals investing needs.<\/p>\n Diversify Your Long Life<\/strong><\/p>\n Many investors tend to rely largely on the \u201csafety\u201d of fixed-income to ward off uncertainty during retirement years. While exposure to bonds is important to mitigate downside risks, not having enough diversification in your portfolio could leave you flat footed against inflation. Estimating inflation over long swathes of time can be tricky. So, by holding on to fixed-income securities alone, you could end up eroding your nest egg\u2019s worth – a risk which potentially gets magnified with longer life expectancies. That\u2019s why, it is so crucial to have a\u00a0well-diversified<\/em>\u00a0portfolio.<\/p>\n While bonds and other steady streams of income are important for offering downside protection, exposure to riskier assets such as equity can mitigate inflation risks. In addition, some cash\/cash equivalents are necessary to meet urgent withdrawal needs especially in times of the market\u2019s downside volatility or shrinking liquidity in a recession. At Zacks Investment Management, we build allocations based on an individual\u2019s needs, for both before and after retirement.<\/p>\n Bottom Line for Investors<\/strong><\/p>\n Living longer should not be a burden as long as you follow a financial discipline which can adapt to your evolving needs with age and can work around potential risks to your nest egg. At Zacks Investment Management, we review every client\u2019s financial situation taking into consideration their individual risk tolerance and long-term financial goals along the way. That way, we ensure that longer life expectancies do not thwart their living standards. To understand how your current plans are in line with your retirement goals and time horizon, call us at\u00a01-888-600-2783.<\/em><\/strong><\/p>\n We have also put together a special guide to assist you in planning for a comfortable retirement – \u201cRetirement Made Easy.\u201d This step-by-step guide outlines how to plan for retirement and contains tips related to withdrawals, spending, and tax strategies. It also gives you a sneak peek into some of our top investment strategies. To get your free copy, click on the link below:<\/p>\n","protected":false},"excerpt":{"rendered":" Growing and preserving wealth are critical components in determining your financial well-being after you retire. 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