7 Income Challenges Retirees Don't Expect
Transitioning to a retiree should be a joyous occasion after years of work, yet unforeseen damages and bills threaten to derail your golden years. To protect your savings, consider these income challenges many retirees don’t expect in advance.
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Having enough income to support your lifestyle holds high priority for retirees. Unfortunately, payments can add up without warning and reduce your funds too soon. With so little time left to save, planners will need to secure more sufficient income to live comfortably.
Although we wish for longevity, quality of life can decline over time depending on income. Retirees rarely consider outliving their savings, when realistically 2/3 of your income could be gone before reaching 80. Therefore, securing enough savings is crucial for a long retirement.
Inflation and Taxation
Price changes can quickly take a toll on your savings. As of June 2022, inflation rates accelerated to 9.1%, with tax rates ranging from 10-37%. And prices may rise higher within the next couple of years. Nowadays, saving for retirement isn’t enough; you must also have a safety net to endure soaring prices.
Stock market investments are a popular means for retirees to increase income. Due to market instability, though, investments can instantly shift from losing and gaining. Even trying to obtain stocks is stressful with 10% withdrawal penalties. As a result, retirees need a more reliable and accessible income source.
Retirees recognize the importance of good medical care as you age. Sadly, recent medical advancements have similarly advanced prices for senior healthcare. And when insurance won’t cover the treatment, guess who will foot the bill?
Thus, it is essential retirees acquire a steady income source for their financial and physical health.
Black Swan Events
A “Black Swan” event refers to a possible yet unforeseen event that leaves a major, lasting effect; examples include a robbery, identity theft, or car accident. Though rare, all possibilities could cause your retirement savings to swan dive. In other words, retirees should secure enough stable income for emergencies.
Leaving a Legacy
While living a comfortable retirement is important, retirees also worry about leaving savings behind for their family. How far can a trust fund go if your family needs to pay your lingering debts? Without a reliable income source to support family, your retirement may instead be spent worrying about future financial security.
How PCL's Reverse Mortgages Can Help
Preparing for retirement under various income challenges can be daunting. To ease your concerns, let PCL Financial Group help with a reverse mortgage. Reverse mortgages are not only stable and sustainable but hold several more advantages to support retirees with additional income using their home equity. Benefit with a reverse mortgage and use your home sale profits to settle the loan, leaving whatever money is left to your family.
Settle your concerns for future retirement with the help of PCL Financial Group. To learn more about reverse mortgages, please contact us today.