Are You At Risk Of Outliving Your Retirement Funds?

What can you do to increase your chances of having a comfortable retirement with enough money to enjoy life? In this article, we share some tips on how to reduce the risk of outliving your retirement fund.

The good news is that we are all living longer, healthier lives. The bad news is that many of us are outliving our retirement nest eggs. Not being able to enjoy the kind of retirement you envisaged or worse still outliving your retirement savings is now a very real fear for many retirees or those approaching retirement age. So, what can you do to increase your chances of having a comfortable retirement with enough money to enjoy life? In this article, we share some tips on how to reduce the risk of outliving your retirement fund.

Do you have a retirement budget?

The starting point has to be knowing how much you are going to need to sustain the lifestyle you want to in retirement. And with many people living 20 plus years as retirees, it's important not to underestimate your needs. Use our online retirement calculator to help you work out a realistic budget.

It's also a good idea to come up with a withdrawal strategy. Some people starting their retirement who suddenly have access to a large pool of money can overestimate how long that pool will last and end up spending too much too quickly. This can put them at risk of outliving their savings. Others are so terrified that they will run out of money that they are reluctant to touch their assets and investments and end up living a lifestyle that is below what they can reasonably afford.

It's a balancing act and the accepted wisdom is that you should be able to draw 4 per cent of your savings a year; however, a customised approach that is more reflective of your age, gender and appetite for risk is probably a better idea. Younger retirees, for example, may benefit from being more cautious whereas older ones could perhaps afford to be less guarded in their spending. Get in touch with us here at Cave Financial for some independent advice tailored to your situation.

Do you have enough diversity in your retirement portfolio?

Are you locked into low returns from term deposits? Or perhaps you've made the mistake of thinking you need to move your nest egg into cash and bonds? A diversified portfolio is the way to go with a good mix of stocks and bonds. None of us can predict the future and diversifying your investments will ensure your retirement savings can cope with market fluctuations. Invest in a proven process that works and then stick with it. Whatever you do, try not to react to news reports or attempt to read the market. Instead, keep a cool, steady hand on the tiller to maximise your retirement savings.

Still Unsure? Contact Cave Financial

If you're not happy with your current returns, are nervous about whether you might outlive your retirement funds or perhaps you're not sure what your retirement might look like, then please get in touch. We're happy to answer any of your questions and we can also offer some personalised advice. All you need to do is call 09 985 3033 or email us direct at service@cavefinancial.co.nz and give yourself peace of mind that outliving your retirement funds will not be on the cards for you.