Retirement Saving Income The Demographic Shift
Next Previous Index Tellout Home

Retirement Saving Income
Page 6

Social Security Benefits

The vexing problem with living off of your savings is that no previous generation has ever had to perform this feat. Previous generations had income from pensions and Social Security throughout their retirement years and any savings were considered a bonus. They didn't have to "live on their savings" alone, so there is really no past model to learn from when it comes to converting savings to income. The question then becomes, how much of your savings should you spend each year? If you spend too much, you may find yourself existing on meager Social Security benefits, which won't buy very much of anything.

Lifestyle Deprivation

Alternatively, if you spend too conservatively, you could deprive yourself of the lifestyle you worked for. Unfortunately, the financial experts we've relied on for so long have been trained in ways to build savings and not on the best means to access them. Therefore, converting your accumulated savings into income that you will not outlive is a challenge that you will need to face. For instance, if you become a grandparent, your financial objectives may change from a simple, guaranteed-income design, to one that will leave some of your wealth for your beneficiaries. Of course, the other factor is the value of homes. Though they may have skyrocketed in recent years we all still need somewhere to live. Hence there is a trend from city to country where cheaper accommodation may be found. A further factor is the current interest rates. When they start to rise, as they surely will, a mortgage will get too expensive to carry along with other loans, the only redeeming factor is that savings may earn a little more but probably not enough to make a difference.

"Retirement Saving Income"
by Ron Meacock © 2019

Top Page Next Previous