IN Brentwood-Baldwin-Whitehall Fall 2016 | Page 11

INDUSTRY INSIGHT

YOUR RETIREMENT

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Read This if You Want to Retire Early

T

he ability to retire early is a frequent desire I hear from my clients
and prospective clients. For this purpose I am defining early
retirement as any time before you become eligible for full Social
Security benefits, which for most baby boomers starts at age 66.
While early retirement may be a dream or a goal, how well have you
prepared for that outcome? While you may be one of the few who
did work to prepare for early retirement, you may need to revisit your
assumptions.
Some of the reasons you will need to revisit your plans include:
• Historically Low Interest Rates
• Global Economic Slowdown
• Lower Than Normal Stock Market Performance Expectations
• Longer Life Expectancy
• Increasing Health Care Costs
• Inflation
• Your Plans in Retirement
Let’s examine these items in more detail.
Low Interest Rates
Anyone who has a bank account today knows how little you are
earning on your cash. Today’s low interest rates are great for borrowers
but what if you want to retire and live off of your savings? Who could
have imagined working and saving for 40 years only to find out that
when you retire, the best CD rate available to you is barely 1%? Can
you live off that?
I don’t think that retirees should count on higher rates to secure
future income. We don’t know what interest rates on savings will be in
five or 10 years from now.

Inflation
Many prospective retirees think inflation will not impact them.
Wrong! In fact, living on a fixed income in retirement means you might
realize inflation faster than while you were still employed.
Your Plans in Retirement
I insist that my clients start planning for their retirement early
and working with me well into retirement. It is important to know
whether your retirement budget supports the activities that you want
to enjoy. Do you know how you will spend your day? How much will
those activities cost? Will you be doing volunteer work or going to
the casino every week? Will you garden or travel? Retirement means
plenty of free time and, for some people, free time means spending
lots of money. Retirement doesn’t just happen one day. A successful
retirement is the result of careful financial planning. An experienced
financial advisor can help your income match your vision of life in
retirement. If done right, you should only have to retire once!
The opinions voiced in this material are for general information only and are
not intended to be a substitute for specific individualized tax or legal advice. We
suggest that you discuss your specific situation with a qualified tax or legal advisor.
Securities offered through LPL Financial, member FINRA/SIPC.

Global Economic Slowdown
If you follow the world news at all, then you are aware that many
countries outside of the U.S. are experiencing economic issues. While
China’s slowdown has been publicized, the recent “Brexit” vote has cast
many uncertainties about Europe’s future growth.
U.S. Market Expectations
Many of us have been spoiled by the U.S. market gains from 20102014 with little volatility. Since August 2015 we have seen extreme
market volatility with nominal gains. What can we expect in the next
five years? Opinions are mixed.
Longer Life Expectancy
Good news: people are living longer than ever! Bad news: you may
outlive your money! Thorough planning means you will have sources
of lifetime income. If we knew how long we would live, retirement
income planning would be a breeze. But the bottom line is we don’t.
Therefore it is critical that lifetime sources of income are included in
your portfolio. I can’t, and don’t want to, imagine what it would feel
like to be 85 and run out of income due to a lack of thorough planning.
Increasing Health Care Costs
Part of living longer means that you may need to pay for more
health care or may even require nursing home stays. Who knows what
medical care will look like or cost in 10 years? Should you have LongTerm Care Insurance?
This Industry Insight was written by Edward J. Harris, CPA.

For more than 25 years, Edward Harris has provided his clients with
professional service in wealth planning, investments, tax planning
and preparation, as well as estate planning. Ed is fully licensed
as a Certified Public Accountant and LPL Investment Advisor
Representative. To maintain his licenses, Ed upholds high ethical
standards and meets the profession’s rigorous requirements for
ongoing education. He has access to variable annuities as well as
accident, health, and long-term care insurance. For more information
contact Edward Harris at 724.942.3300 or visit www.harriswm.com.

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