ELGIN, IL — Sometimes a whole crate of birthday candles might not be enough. Americans are living longer than ever, with the average life expectancy now rising to about 79 years. Some have referred to this trend as the “longevity revolution,” but it’s also creating a revolution in the way people think about retirement.
“What worked for retirees a generation ago isn’t going to work today,” says Jack Teboda, president of Teboda & Associates (www.teboda.com), a financial services firm. “For most people, pensions are no more. Social Security has an uncertain future. And individual savings aren’t where they need to be for far too many people.”
That means people need to consider a number of factors to improve the odds of a joyful retirement, which is one reason Teboda says his firm takes a team approach to advising, using financial professionals with different areas of expertise.
For example, one team member, Amanda Jager, is an associate financial adviser, and another, Kevin C. Sanders, is also an associate financial adviser and attorney specializing in estate planning.
Teboda says just a few of the factors retirees need to be aware of are:
As people save for retirement, they often make plans based on the total amount in their accounts, but neglect to think about what kind of effect taxes will have on their bottom line.
“Many retirees have money in tax-deferred vehicles, such as a traditional IRA or a 401(k),” Teboda says. “That means they were able to put off paying income taxes on the money while they were accumulating it, but once those same people are in retirement and start withdrawing money, it becomes taxable.”
It’s important when planning for retirement to consider and understand all the tax ramifications, he says.
Long-term care needs
When it comes to longevity, outliving the money isn’t the only concern, Teboda says. There’s also a greater chance that, as the decades pass, personal health will decline and retiree’s will be in need of some sort of long-term care, which can be expensive.
“It’s worthwhile to consider planning for that possibility,” he says. “There are options for coming up with a long-term care strategy, but retiree’s will want to make decisions based on their particular needs and circumstances.”
Market risks, retirees
In general, the longer a person invests the more potential their money has to grow, but not everyone has the same risk tolerance. An aggressive-investing approach that could pay off more in the long run can make some people nervous.
“For those people, there are conservative investment options that can still provide the potential for wealth accumulation,” Teboda says.
One possibility is an annuity, which is an insurance product that pays the person a monthly amount for the rest of their lives, much like a pension. “Once a person is in retirement,” Teboda says, “they don’t want to endure a big loss in the market that they won’t have time to bounce back from.”
“With a real possibility that retirement could last three decades or longer, people need to put themselves in the best financial position possible,” Teboda says. “Anyone who doesn’t have a solid retirement plan and is just leaving things to chance could be making a very costly mistake.”
Jack Teboda, president and founder of Teboda & Associates (www.teboda.com), has more than 35 years of experience helping people pursue financial independence through personalized investment strategies. His firm takes a team approach to providing advice to clients on retirement concerns and other financial planning issues.
Teboda works with Kevin C. Sanders, an attorney and associate financial adviser, and Amanda Jager, an associate financial adviser. Teboda has passed Series 6, 22, 63 and 65 securities exams and holds life, accident and health insurance licenses.
Additionally, Teboda earned a bachelor’s degree from Iowa State University and a master’s degree from Northern Illinois University. As an investment adviser representative, he is able to provide an extensive network of financial options and products for his clients.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Teboda & Associates are not affiliated companies. Investing involves risk, including the potential loss of principal. Neither the firm nor its agents or representatives may give tax advice.
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