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Today, Americans are living longer — and staying healthier. The average life expectancy is about 85 years, depending on current age and gender. One out of four 65-year-olds will live past 90.
That’s great news, but it also means retirement is lasting longer. You’ll need sufficient resources to fund the lifestyle you want for 20 or more years after you stop working. Learning about retirement income planning and savings plans is a great way to start planning for a source of retirement income. These suggestions can be used to help form a retirement plan for living longer.
Because of longer life expectancies, sound financial choices — before and during retirement — are more essential than ever. Saving early and regularly is just one step. Not spending too much of your retirement savings too early or too quickly is another. For example, although you can withdraw from an Individual Retirement Account without penalties beginning at age 59 ½, you should consider whether that’s the best plan. If you are likely to live another quarter century, you may need to wait longer before withdrawing your funds.
Anticipating a long life means taking the long view in your retirement planning. Make retirement income projections that strike a balance between the risk of spending your funds too quickly (leaving yourself little to live on in later years) and spending them too slowly (unnecessarily reducing your retirement standard of living).
In addition to understanding your expected longevity, answering the following questions can bring clarity to your retirement income needs:
Answering these questions might require some research, but your reward will be greater peace of mind as you approach and enter retirement. A financial advisor can work with you to devise the best retirement planning strategy that accounts for your unique goals and needs.
Every step you take today to plan for a long life will help you enter retirement with that much more confidence. Given how many retirement years you’re likely to have, it’s time well-spent.
We’re committed to your financial success. Here you’ll find a wide range of helpful information, interactive tools, practical strategies, and more — all designed to help you increase your financial literacy and reach your financial goals.
These articles have been prepared for informational purposes only and are not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. The accuracy and completeness of this information is not guaranteed and is subject to change. Since each investor’s situation is unique you need to review your specific investment objectives, risk tolerance and liquidity needs with your financial professional(s) before a suitable investment strategy can be selected. Also, since Wells Fargo Advisors does not provide tax or legal advice, investors need to consult with their own tax and legal advisors before taking any action that may have tax or legal consequences.
Retirement Professionals are registered representatives of Wells Fargo Advisors, LLC. Wells Fargo Advisors is the trade name used by two separate registered broker-dealers: Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, non-bank affiliates of Wells Fargo & Company. Discussions with Retirement Professionals may lead to a referral to Wells Fargo Advisors’ affiliates including Wells Fargo Bank, N.A. Wells Fargo Advisors and its associates may receive a financial or other benefit for this referral. Wells Fargo Bank, N.A. is a banking affiliate of Wells Fargo & Company.