​Just starting your retirement planning? Don’t worry. You have company. According to a recent study, nearly a third of Americans have no retirement savings, and an additional 22 percent have less than $10,000.1
 
No matter where you’re starting from, the simple act of developing a plan is always a step in the right direction. Your plan can help you track your progress toward your goal and help you make informed financial decisions along the way. Even if you’re getting a late start, you still have time to accumulate assets and live an enjoyable and comfortable retirement.
 
Every solid financial plan should be built on a foundation of solid financial habits. Retirement is a significant financial goal. You can put yourself in a better position to reach your goals by developing disciplined habits that will serve you throughout your life. Below are a few questions about your current approach to financial management. If you don’t know how to answer these questions, now may be the right time to meet with a financial professional and develop a new strategy.

Do you use a budget?
 
According to a study from U.S. Bank, nearly 60 percent of Americans don’t use a budget.2 That’s an unfortunate statistic considering that a budget is one of the most effective financial tools at your disposal.
 
You can use a budget to keep track of your spending, cut your expenses and save more money for retirement. It’s difficult to stick to a plan and meet your savings goals without knowing how much you spend and where your money goes. With a budget, you can identify areas where you’re overspending and then make the appropriate changes to your behavior.
 
There are plenty of apps, websites and computer programs you can use to create your budget. However, a simple spreadsheet is also effective. If you’re one of the 60 percent of Americans who don’t use a budget, now may be the time to make a change.

What’s your plan to increase your income and your ability to save?
 
Investing is an important part of any retirement strategy. Your investment portfolio can help you increase your assets and accumulate the funds you need to live your ideal retirement.
 
However, your most important investment could be in yourself. Your ability to save is dependent on your income. If you can increase your income throughout your career, you can also increase your savings capacity.
 
Consider ways you can improve your skills and advance your career. Could you further your education and earn a promotion? Could you learn new skills to make yourself more attractive to employers? Or is it time to consider a career change so you can elevate your earnings?
 
Your earnings drive your ability to save. Of course, as your income increases, it’s important that you allocate those additional funds to savings. If you simply spend the additional money, you won’t capture the benefit of your increased earnings.

Do you have too much exposure to risk?
 
Retirement planning is about accumulating assets, but it’s also about minimizing your exposure to risk. Any number of threats could derail your retirement plans. You could become disabled and have limited earning potential. You or your spouse could pass away unexpectedly, creating a financial crisis for the family. You could see a sizable downturn in the value of your investments. You might face a costly health care challenge that drains your savings.
 
Develop a retirement strategy that minimizes your exposure to these risks and others. Insurance is an effective risk management tool. You can use disability insurance to replace your income should you suffer a serious injury or illness. Life insurance can protect your family should you pass away. A financial professional can also help you find tools and strategies that reduce your exposure to market risk.
 
Ready to build your retirement strategy? Let’s talk about it. Contact us today at Stoll and Basler Financial Services. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1http://time.com/money/4258451/retirement-savings-survey/
2https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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Are you planning your Social Security strategy? Social Security is a valuable resource, as it’s one of the few guaranteed income sources available for retirees. It will likely play an important role in your financial picture. But how much do you actually know about Social Security?
 
Below are a few interesting facts about the Social Security program. As you approach retirement, take time to research your Social Security options so you can make an informed decision about your benefits.
 
Nearly every retiree relies on Social Security. The Social Security Administration estimates that 9 out of 10 retirees rely on Social Security for income. Social Security isn’t just for retirees, though. In addition to providing income for 45 million retired workers, it also provides income to more than 10 million disabled workers and 6 million survivors.1
 
Many retirees count on Social Security for a large chunk of their income. According to the Social Security Administration, a third of all retiree income comes from Social Security benefits. Nearly half of all retired married couples and 71 percent of single retirees rely on Social Security for more than half of their income.1
 
Retirees are living longer than ever. Social Security started paying regular monthly benefits to retirees in 1940. At that time, a 65-year-old could expect to live for another 14 years. Today a 65-year-old is expected to live an additional 20 years. The number of retirees over age 65 is expected to increase from 49 million today to more than 79 million by 2035.1
 
Social Security increases your income to keep up with inflation. Social Security offers cost-of-living adjustments (COLAs) to help retirees keep up with inflation. However, the adjustment isn’t guaranteed and may not happen every year. In 2017 the increase was 2 percent. In 2016 it was 0.3 percent. There was no increase at all in 2015.2
 
Social Security COLAs have historically been lower than the inflation rate for health care. Social Security COLAs are based on the consumer price index (CPI). However, the CPI doesn’t account for the fact that seniors spend more on health care than the overall population. Thus, the CPI may not weigh medical costs in a way that’s reflective of retirees’ true costs. The result is that Social Security COLAs haven’t kept up with health care inflation in 33 of the past 35 years.3
 
There’s a cap on your Social Security benefits. The maximum Social Security benefit is currently $2,687 per month, but it’s adjusted regularly based on inflation. You probably don’t need to worry about the cap, though. The average benefit amount is just over $1,300 per month.3
 
The earliest you can file for benefits is age 62. Many people choose to file for benefits as soon as they’re eligible. If you file before your full retirement age (FRA), however, you could see a permanent reduction in your monthly benefit. Most people reach their FRA between their 66th and 67th birthdays. If you file before your FRA, your benefit will be reduced, perhaps as much as 35 percent.4
 
You can delay your filing past your FRA. You may wonder why anyone would delay their Social Security benefit. The main reason is because Social Security offers an 8 percent benefit credit for each year past your FRA that you delay your filing. The latest you can delay your filing is age 70. If your FRA is 66 and you wait until age 70, your benefit could increase as much as 32 percent.5
 
Social Security will start running deficits in 2020. We’re only a few years away from Social Security starting to run annual deficits. That means the program will pay out more in benefits than it brings in through payroll taxes. Without changes, the Social Security trust fund will be completely depleted by 2034.6
 
That doesn’t mean Social Security will end in 2034. It’s possible that Social Security could last to 2090 even if the trust fund is depleted in 2034. However, doing so may require a 21 percent cut in benefits across the board.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Stoll and Basler Financial Services. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/oact/cola/colaseries.html
3https://www.fool.com/retirement/2016/12/04/25-social-security-facts-figures-you-need-to-see.aspx
4https://www.ssa.gov/planners/retire/agereduction.html
5https://www.ssa.gov/planners/retire/delayret.html
6https://www.fool.com/retirement/2017/05/22/a-big-social-security-change-is-coming-in-2020-and.aspx
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
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