An article from Investor Business Daily was released over this past weekend that stated that half of all American retirees will have to make big spending cuts within five years of retiring. A study by the Consumer Financial Protection Bureau said that only 51% of Americans that retired between 1992 and 2014 had enough income to sustain the level of income that they were used to or that they were expecting to have in retirement. Those people had to make cuts within their expenses. On average their living expenses and lifestyle were cut by 28%, which is a staggering statistic. So, nearly half of Americans within five years after retirement are having to adjust their expenses down 28% or over a quarter of what they normally spend. Why are people in that situation in the first place? The answer is that those people most likely did not have a sound financial plan in place going into retirement.
The Right Way
Here at Fi Plan Partners, when we build comprehensive plans, we look at every scenario and we model it out to age 100 using very conservative inputs. From the years 1992 to 2014, when this study was done, there were a lot of interesting and volatile things happening in the stock market and in the world in general. The Gulf war, the dot com bubble, 9/11, and the great recession are a few of those things. All of these caused extreme volatility in the markets. When we put together Financial Blueprints for our clients, we build those volatile situations in. We make sure that we incorporate everything that could happen in the future in those plans. As a result, your plan can weather the storm no matter what happens once you retire. Looking at the statistics from recent studies really illustrates the importance of creating a Financial Blueprint and how important it is to have a solid plan in place that’s stress-tested for worst-case scenarios. We do just that at Fi Plan Partners. It ensures that whatever your retirement and goals look like, that you can achieve those no matter what the situation.
If you feel uncertain about your retirement and your financial future or you know anyone that feels the same way, please give them our contact information and have them reach out to us. We want to help as many people as we can navigate these situations.
Greg Powell, CIMA®
President and CEO
Email Greg Powell here
Jay McGowan, CFP®, CPA, PFS
Senior Vice President
Director of Financial Planning
Email Jay McGowan Here
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.
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