Retirement planning demands consistency, especially as inflation chips away at your money’s value. A $100 item today will cost around $134 in 10 years with a 3% annual inflation rate. Your retirement consultant in Fresno CA will explore how this hidden drain on your savings impacts everyone, whatever their income level.
The financial picture looks concerning even for high earners. Half of the employees earning over $100,000 yearly worry about their financial stability. The situation becomes more alarming as 63% of workers can’t handle a $500 emergency expense. These numbers show why consistent saving habits matter for a secure retirement.
Build a Strong Financial Foundation
Your future financial security gets a powerful boost when you start saving for retirement early. Research shows that people who save in their 20s are 66% more likely to retire by 60. This early advantage lets you make use of compound interest’s extraordinary power.
Let’s look at a real example. You could grow your nest egg by a lot if you invest $250 monthly with an 8% average annual return until age 65. A 25-year-old’s $2,400 yearly investment will grow more by age 65 than someone who starts at 35 investing $3,600 yearly.
Diversify and Protect Your Investments
Diversification is your best defense against market volatility. The basic contours are simple – you spread investments across different asset classes to avoid depending too much on any single one. This approach won’t guarantee profits but substantially reduces your potential risks.
Your well-balanced portfolio should mix stocks, bonds, and alternative investments in a variety of sectors and regions. If you’re approaching retirement, a moderate portfolio with 60% stocks, 35% bonds, and 5% cash (ages 60-69) makes sense. You can move to more conservative allocations as you age.
Treasury Inflation-Protected Securities (TIPS) provide excellent protection against inflation because their principal values rise with the Consumer Price Index. TIPS now offer positive “real” yields, so investors who hold them to maturity can earn inflation-adjusted returns whatever the inflation rates.
Plan for the Unexpected and Long-Term
Healthcare costs blindside many people as a major retirement planning challenge. Medical expenses rank among the largest retirement costs for most Americans. A 65-year-old who retires in 2025 might need $172,500 in after-tax savings just to cover healthcare. This makes proper planning vital.
The numbers get even more striking. Fidelity’s research indicates that couples might need $330,000 for healthcare through retirement. The situation looks more daunting as nearly 70% of people over 65 will need some form of long-term care. A semi-private nursing home room costs between $8,000-$9,000 monthly.
Annual financial reviews become crucial as retirement approaches. These check-ups help you spot coverage gaps, check beneficiary designations, and adapt to tax law changes.
Conclusion
We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to see how we can help you Retire ”Your Way!”
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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.
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