Retirement financial planning is crucial because many Americans are at risk to outlive their money. Or at the least they risk having to make sacrifices and live below their preferred standard of living. Some are worried about even making it to retirement. In fact, according to a study by the Boston College, “one in three baby boomers don’t think they’ll ever be able to retire.”

Gone are the days of pensions and retirement bonuses after working at the same company for 40 years. Seniors are largely dependent on personal savings, investments and other assets for retirement cash flow and many are sorely under-prepared. You can use this calculator to see how much you’ll need.

How Much Should you Save for Retirement?

Consider the trends. Do you think expenses will go up or down over time? History reveals expenses rarely decrease. Inflation, medical costs, taxes, housing prices, fuel and gasoline, food prices, etc, all increase over time. Think back to the $1.25/gallon gas prices in 1995, only 25 years ago. It’s a far cry from our $2.50/gallon prices in 2020. Take a look at median housing prices overtime in the US.

“History reveals expenses rarely decrease.”

Medical Costs in Retirement

“Yeah, but that won’t happen to me.” Everyone thinks this, but statistically it’s just not true. Nearly two thirds of Americans will require long term care in their lifetime. Health is a primary concern for retirees. According to, the average couple could expect to spend up to $285,000 on medical expenses, not including long term care costs.

“Retirees will likely need twice as much money as they currently have saved.”

Because of medical advances, exercise and new technology, length of life is being extended and people are living longer. As our society continues to progress, become more healthy and for some of us, potentially live to be 100 (according to the National Institute on Aging), the reality that we need more money begins to set in. Most financial planners recommend saving enough for 30 years of living expenses in retirement.

One way to hedge against this risk is to look at life insurance with a long-term care rider and living benefits. Many people are interested in financial planning strategies that involve life insurance. In some cases, living benefits, available through life insurance, have proven to be helpful in the retirement planning process. Local agents work with clients to help them understand the potential advantages of having a well-developed plan.

Market Uncertainty in Retirement

After the Great Recession in 2008, many are eager to examine the threat of future market fluctuations. Interest rates and economic growth play a big role in housing prices and thus, market volatility. For many retirees who own their home, this is their largest asset. In some cases, a reverse mortgage might be a good option. This is no longer the loan of last resort. More than 1 million Americans have a reverse mortgage. According to AARP, “93 percent of borrowers reported that their reverse mortgages had had a mostly positive effect on their lives.” However, this product is not for everyone, for more information do some research. is a site that has a lot of good information for those considering a reverse mortgage.

Also, if you can afford to wait until age 70 to begin withdrawing Social Security benefits, you’ll be eligible for a much larger monthly benefit. For many, delaying social security past full retirement age can be a big advantage to future cash flow. Of course, there are reasons to take Social Security at full retirement age, or even before. This is a great conversation to have with your financial planner, before making the decision.

The Financial Retirement Planning Imperative

As our economy grows, it means more options on how to spend your money.  In general, this is positive for consumers. However, medical advances mean we are living longer and while this is great, it does put us at risk to outlive our money. You need to be savvy in considering what you will spend on in retirement and ways to stretch your current assets.  Perhaps you should also be thinking about how you can generate new streams of income through work or business options.

The odds of a financially successful retirement are much better when you are well prepared. Please don’t neglect your financial retirement planning. Today is a great time to start!

Here are more great ideas on how to use financial retirement planning to make sure you don’t outlive your money.

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