​It’s vacation season! Where are you travelling to this summer? Are you headed to the beach to soak up the sun and enjoy the waves? Or are you more of a lakes and mountains person? Perhaps you’re travelling to historical sites or a favorite national park.
 
Whatever your vacation plans may be, there’s no doubt that it’s nice to get away, relax, and recharge. If you’re like most people, you probably dread the end of your vacation and the return to the daily grind.
 
Fortunately, there’s a light at the end of the tunnel. Retirement is your opportunity to leave the working world behind and live life on your terms. You can hit the beach, the mountains, the golf course, or pursue any other activity that you enjoy.
 
Of course, to truly live life on your terms in retirement, you’ll need a strong financial foundation. If you don’t have the right strategy in place, you may not have the means to enjoy your golden years. Below are a few tips to consider as you approach retirement. Implement these ideas and your retirement can be one long vacation.

Use a budget. 

According to a recent study from Debt.com, 33 percent of Americans don’t use a budget.1 If you’re among those who do use a budget, you’re off to a good start. However, if you don’t use one, now may be the time to start doing so.
 
A budget is one of the most powerful financial tools at your disposal. You can use it to track your spending and make informed purchasing decisions. Your budget can keep your spending under control so you can boost your savings.
 
A budget can also be helpful when you enter your retirement. You’ll likely enter retirement with more assets than you’ve ever had. It can be tempting to spend that money on vacations, shopping, dining out, and more. Retirement can last several decades, though. If you spend too much in the early years of retirement, you may not have enough assets left in the later years. A budget can help you control your spending and make your assets last.

Create guaranteed* income. 

One way to preserve your assets is to develop income streams that cover your expenses. If you have enough guaranteed* retirement income to fund your regular expenses, you can use your savings to fund discretionary costs like travel.
 
Social Security is a common source of guaranteed* income. If you’re fortunate enough to have a defined benefit pension, that can also be a source of guaranteed* lifetime income. However, you may need additional income to cover your expenses.
 
An annuity may be an option to consider. There are several different types of annuities you can use to generate guaranteed* income. For instance, some annuities offer a guaranteed* withdrawal benefit. Your funds have the potential to grow and you can withdraw up to a certain amount each year. As long as you stay within the withdrawal limits, the income is guaranteed* for life. This kind of guaranteed* income can give you financial predictability and certainty.

Minimize risk. 

Nothing can derail your retirement plans like a costly emergency. For retirees, health care expenses can be especially dangerous. Fidelity estimates that the average retiree will spend $285,000 out-of-pocket on health care costs like deductibles, premiums and copays.2
 
You can take steps now to minimize those costs. For example, a health savings account (HSA) could help you pay for out-of-pocket medical expenses. Long-term care insurance could help you pay for extended care, either in your home or in a facility.

Also consider the importance of life insurance in retirement. If you have a spouse who is dependent on your defined benefit pension benefit or other income, life insurance could be a key risk protection vehicle. If you pass away, your spouse may face serious financial challenges, and that could limit their ability to enjoy the remainder of their retirement.
 
Ready to plan your ideal retirement? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019----although-they-think-everyone-else-should-300824384.html
2https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
19007 - 2019/6/27

​In an ideal world, you could save money and prepare for retirement without any risks or threats. Unfortunately, risk is a natural part of any financial strategy. There are a wide range of risks that could potentially derail your plan. Medical emergencies, disability, job loss, and more could cut into your savings and limit your ability to retire comfortably.
 
Your savings and investments also face market risk. Volatility is a component in nearly every financial market. Assets rise in value, but they can also fall. Depending on your allocation, those declines could put your investments at risk.
 
Risk and return also tend to go hand-in-hand. Many of the assets that have the highest long-term historical returns also have the high levels of volatility. Assets that tend to have little risk exposure also may have limited return potential.
 
How do you grow your assets without taking on too much risk exposure? One effective strategy is to align your allocation with your risk tolerance. Your risk tolerance is your own personal threshold for downside movement. Everyone’s risk tolerance is different. It should be based on your specific needs and goals, as well as other factors.
 
Is your allocation aligned with your risk tolerance? Do you know your risk tolerance level? If not, now may be the time to review your plan. A financial professional can help you determine how much risk is right for you. Below are a few factors to consider as you get started:

Goals 

Any risk tolerance analysis should start with a review of your goals. Why are you saving money? The size of your goal will influence your strategy.
 
For example, assume you’re saving for retirement, which is a sizable goal. You’ll likely need to grow your money over a long period of time to reach your objective, so you may need to take some risk to get your desired level of return.
 
However, assume you’re saving for a down payment for a home purchase. In this case, growing your money may not be as important as simply protecting it. An account or asset with little or no risk could be more appropriate for a goal of that size.

Time Horizon 

When will you actually need to use your savings? The amount of time you have until you need to use your assets is known as your time horizon. The longer your time horizon, the more tolerance you may have for risk.
 
Assume you intend to retire in five years. You may not have much tolerance for market loss. If the market declines, you may not have time to participate in the recovery. On the other hand, assume you aren’t retiring for 30 years. If the market declines, you have plenty of time to recover, so it may make sense to take on greater risk exposure in the pursuit of higher returns.

Personal Preference 

Every person is different, so there’s no universal correct answer on how much risk is appropriate. Your personal preferences should be an important consideration. Some people are naturally more comfortable with risk than others.
 
How do you feel when your investments decline in value? Does it cause stress and anxiety? Or does it barely register on your radar? If your risk level keeps you up at night or causes you to question your strategy, that could be a sign that you are allocated too aggressively.
 
Ready for an allocation that is right for your risk tolerance? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
19014 - 2019/7/1