Category: Senior Living

What is the retiree’s biggest fear?

The retiree’s biggest fear is running out of money.

According to a recent survey, six out of ten retirees say they’re worried about their finances.  Their two biggest fears are getting sick and losing their assets to pay for medical care.  Their next greatest fear is that they’ll stay healthy and outlive their money.

And little wonder.  Interest rates on savings accounts have been near zero for years.  The stock markets remain scary to many potential investors.  And while the official inflation numbers are low, anyone who has shopped for food, filled their gas tank or visited a doctor knows that prices are going up rapidly.

This is a daunting environment for people who are managing their investments on their own.

Still others think they have diversified by having several “financial advisors” and accounts at several major investment firms.  What they actually end up having are accounts with several investment salesmen who make their money by selling them investment products.

How do high-net-worth families manage their finances?  Most prefer to work with a single firm to manage all their financial needs.  It’s a mistake to depend on stock and bond salesmen when it comes to providing planning and guidance.  They want someone who acts as a fiduciary.  A fiduciary is someone who puts your needs and ahead of his own.  That describes a fee-only RIA (Registered Investment Advisor) like Korving & Company.  Our concerns are your concerns.  Our goal is to alleviate people’s fears of running out of money in retirement.

Check out our website and see what we offer to families approaching retirement and those already in retirement.  And download and read the first three chapters of BEFORE I GO, free.

Discussing the Inevitable With Retired Clients

The headline in a recent issue of Financial Planning addressed the issues that we face as we get older.
The typical 65 year-old will live another 19.2 years on average.  During that time they may be faced with increased expenses that could include a nursing home. Which is why many people buy long-term-care insurance.  But many of these policies were issued before the insurance companies had adequate data on the cost of care and the length of time people would live in nursing homes.  Many companies have dropped out of the market and others are increasing their premiums.  Consult with your investment advisor on whether and how you should insure.
But there is no question that whatever the journey our lives take, at some point it comes to an end.  At that point, those left behind have to take care of things, and they often wish they better information.  Which is why I strongly recommend that everyone should learn the most common things that are overlooked when planning for that moment.  It’s all found in “Before I Go.”
Get a copy today.

Where do you plan to retire?

I began looking at a list of “worst states to retire in” at and it struck me then how badly people are misled by books, magazines and internet sites.  They chose the following criteria:

  • High life expectancy
  • Low crime rate
  • Where people are prosperous

Do these make sense as a way of choosing your retirement location?

First, average life expectancy is a statistic that is much more affected by the death rate of young people than old people.  Second, by the time you are ready to retire your lifestyle and heredity has the biggest impact on how long you will live and the average age of the people around has no impact at all.

The crime rate is another flawed statistic.  Detroit and Chicago are some of the most crime ridden cities in the country, but you can find areas in and around these cities that are virtually crime free.   To assign a crime rate to an area the size of a state, and make a retirement decision based on that is nonsense.

The prosperity of people in a state is another spurious reason for moving to an area for retirees.  In fact, there are good reasons for avoiding “prosperous” areas.  They are often associated with astronomical real estate prices, high taxes and high cost of living.  Want to live in Sausalito, Beverly Hills or even the better parts of Manhattan?  Bring big buck and prepare to spend them.

How do people really choose where they want to live in retirement?  The number one reason for choosing a retirement home is proximity to family, usually the children.  The other issues are climate (the reason so many Northerners move to Florida), the cost of living (including taxes) and access to medical care.  An interesting trend is retiring in low-cost parts of Mexico or Central America.

Choosing a retirement community is a big decision and we have seen a number of examples of retirees who changed their minds after moving.  Keep your options open, especially if you are moving to areas that are new to you.  Take time to settle in and decide if this is where you want to spend the rest of your life.

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