What is the Best Retirement Strategy?
If you're looking for the best retirement plan, you have to look at the results that you want. In a general sense, the best retirement strategy or plan is the one that helps you to reach your goals, so that you can retire when you want to, allowing you to do what you want, when you want. It allows you to be financially independent, not be a burden on your children. It allows you to have financial freedom. That's the best retirement strategy or plan.
As you're considering how to develop these plans, you want to make sure that it's conservative. The best retirement strategy or plan is a conservative one because it gives you the best chance of reaching your goals. So how do you make your retirement strategy or plan conservative? Let's dig into the details. There are four ways to build a conservative retirement plan.
1. Plan to live a long time: For men, the average is 76. So if you want your strategy to be conservative, plan to live to be 85 or more. For women, the average age is 80, so for your financial and retirement planning, prepare to ensure that your money can last until you're 90. This gives you a comfortable cushion if you don't reach these ages, and you won't run out of money if you do.
2. Project down on returns:
Another part of creating a conservative retirement strategy is to project down on the returns.
As you're projecting how your portfolio might perform, both up until retirement and during retirement, I suggest you lower the returns. Don't go overboard with a ridiculously low level like 1%, but I would make sure that you use lower numbers that what we've seen historically, so that you can plan for worst case scenario.
3. Plan for the worst case scenario: Make sure that you run your portfolio, testing it through the worst market crashes that we've ever had. You want to test it through the '73 oil embargo. You want to test it through the financial crisis of 2008. These are some of the best (well, worst) crashes that we've had, so running your portfolio through that and ensuring that even in a similar scenario, you'll still reach your retirement goals is a great way to create a conservative retirement plan.
4. Include health insurance costs: The final way to be conservative in your retirement planning is to make sure that you include health insurance costs in your plan. Put it in there at whatever the going rate is for a single person or married couple, or include your health insurance costs in your living expenses. Either way, you want to make sure that you include the full cost of health insurance in your planning.
These are four ways that you can have the best retirement strategy or plan to ensure that you reach your goals for financial freedom in your retirement.
If you want to discuss how these 4 items addressing on what is the best retirement strategy impacts you and your retirement; you may set up a short 20 minute call with me to discuss your investment strategy and get a free 2nd opinion on your investment portfolio: https://calendly.com/thomascloud/retirement-ready-success-call. There is no cost or obligation.
Also I encourage you to watch my free retirement video: https://go.thirdactretirement.com/strategy