FINANCE | Prepare for a long retirement | recent news

We all want to live long. We all expect to live long. But are we financially prepared for this longevity?

Before we get into the question of readiness, let’s take a look at some interesting findings from a 2022 survey by Age Wave and Edward Jones:

Retirees surveyed said they expect to live to age 89 on average, and the ideal length of retirement is 29 years.

When asked if they wanted to live to be 100, almost 70% of respondents said “yes”. The main reason for this desire for long life? To spend more years with family and friends.

Of course, none of us can see into the future and know how long we’ll be here. But with advances in medical care and greater awareness of healthy lifestyles, these aspirations have a real basis in reality.

However, if you want to enjoy a longer life and extra years with your loved ones, you also need to make sure your finances are in good shape. How can you make this happen?

Here are some basic steps to follow:

Save and invest early and often. It may be the oldest financial advice, but it is still valid. The earlier you start saving and investing for your retirement, the greater your accumulation potential. Consider this: if you started saving just $5,000 a year at age 25, earned a hypothetical annual rate of return of 6.5%, and made no early withdrawals, you would end up with 935 $000 when you turn 65. But if you waited until 35 years to start saving and investing and got the same hypothetical return of 6.5% – again with no early withdrawals – you’d only get $460,000. And if you didn’t start saving until age 45, you’d end up with just over $200,000, again with the same 6.5% return.

Be aware of debt. You may not want to carry certain debts when you retire. So, while you’re still working, try to reduce unwanted debts, especially those that don’t offer the financial benefits of tax-deductible interest payments. The lower your debt, the more you can save and invest for the future.

Keep reviewing your progress. It’s important to monitor the progress you need to make to reach your goal of a comfortable retirement. In the short term, your investment balances can fluctuate, especially in volatile financial markets as we saw earlier this year. But you’ll get a clearer picture of your situation if you look at long-term results. For example, have your accounts grown over the past 10 years as much as expected? And going forward, do you think you are in good shape or will you need to make any changes to your investment strategy? Keep in mind that if you’re 50 or older, you can make “catch-up” contributions to your IRA and 401(k) that allow you to exceed the usual limits. You may also want to adjust the mix of your investments as you approach retirement to potentially reduce your exposure to risk.

I hope you enjoy many years of healthy and happy retirement. And you can help support that vision by carefully examining your financial moves and picking the ones that are right for you.

Jennifer Barrett (AAMS) is a local financial advisor to Edward Jones.

225-612-0413 | [email protected]

Edward Jones. SIPC member.

Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult your estate planning attorney or qualified tax advisor about your situation.

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