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Posted 5/10/23

METRO

Older adults hoping to retire this year may have a new factor to consider. Aspiring retirees may have to play it very smart to ensure they can maximize their savings for the long haul. …

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Did you know?

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METRO

Older adults hoping to retire this year may have a new factor to consider. Aspiring retirees may have to play it very smart to ensure they can maximize their savings for the long haul. It’s a one-two punch caused by continuously rising costs of everyday items and a bearish market for bonds — one of the most common hedges retirement plans use to offset stock declines. Bonds have been suffering historic losses, according to data from Barclays Aggregate Bond Index. The typical rule of thumb used to be to spend no more than 4 percent of a portfolio’s original value each year to plan for retirement. With no gains or losses, that money would last around 25 years. However, experts at The American College of Financial Services say that, in today’s economy, 4 percent and even 3 percent may be too aggressive. According to Nora Dowd Eisenhower, executive director at the Philadelphia Mayor’s Commission on Aging, higher food prices, longer life expectancies and higher rents/housing costs often lead to financial challenges for people in retirement. Data from the U.S. Current Population Survey shows a trend in the number of people no longer in retirement. In September 2022, the unretirement rate was 2.6 percent, up from 2.4 percent in August. Wealth advisors indicate retirees need to look long and hard at their spending habits, even spending less than their wealth could support. This can help them ride out the ups and downs of the market that affect prices on goods and services. Working with a good financial advisor also can help retirees manage their savings to maximize their money for the years to come.

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