This post will cover the last of the Four C’s.
Cost of Living or inflation will need to be considered.
- Inflation
- Obviously if you are living on a fixed income with a relatively fixed asset base, inflation will be a challenge for a successful retirement
- Recently it has been 2% or less
- During the 1970’s, it was 8% or more
- Healthcare costs have been increasing a substantially fast pace
- Clearly healthcare cost will have to be factored into a retirement plan in some fashion
- For many retirees, Social Security will be their only inflation adjusted income source
- Obviously if you are living on a fixed income with a relatively fixed asset base, inflation will be a challenge for a successful retirement
Certainty is something we all strive for in retirement. However many factors are out of our control. For example:
- Life expectancy in general is increasing
- But what will my life expectancy be
- Healthcare costs are typically greatest the last few years of life
- But when and how much will that be
- Investment returns will be variable even if they are generally favorable
- But Sequence of returns risk will be a concern
If any of this information strikes a cord with your thoughts and concerns, it’s time to schedule a visit with a financial planner.