The Psychonomics of Seniors Plays a Major Role in Retirement
You can’t buy happiness, but having adequate income sure helps. The last thing retirees want to do is to stress over finances during the golden years … well they’re supposed to be golden. Most seniors envision having the time and money to visit family, go on special trips or simply eat out at their favorite restaurants. If retirees can’t make ends meet today, then living longer only exacerbates their financial problems and adds to their stress levels.
The happy factor for most retirees is based on guaranteed lifetime income they can’t outlive. There have been studies and articles written on the happiness factor in retirement, so there’s some merit to it. Some of the happiest retirees are those with a corporate defined benefit plan, government workers and retired military. The common theme among these groups is a pension. But most Americans who work in the private sector don’t have an employer defined benefit plan, i.e., a pension. If they do have an employer retirement plan it is more likely a defined contribution plan like a 401(k) and it generally doesn’t include employer-matching funds. So you’re really on your own.
Social Security is like a pension because it also generates guaranteed lifetime income as long as you’re alive. But Social Security rarely generates sufficient income and three of the last six years, hasn’t included a cost of living increase. This may be a harbinger of things to come. If you can work until age 70, you can maximize your Social Security benefits and make additional contributions to your retirement plan.
You can also consider a HECM reverse mortgage that can generate tax-free lifetime income from the equity in your home. Most financial advisors recommend this strategy if the house you’re living in is your retirement home, i.e., your last house.
But there are also guaranteed lifetime income annuities with annual cost-of-living adjustments not correlated to the CPI that can generate lifetime income you can’t outlive. So there are some options that can generate lifetime income for both you and your spouse.
Watch the interview on the happy factor in retirement with Tom Hegna, popular platform speaker, retirement specialist and best-selling author. Tom has two retirement books entitled Don’t Worry, Retire Happy and Paychecks and Playchecks. Tom has also hosted the PBS Special, “Don’t Worry, Retire Happy.”
Most retirees appreciate predictable monthly income. It brings a degree of solace and confidence for the future. For some seniors, it removes the angst and stress over finances. It may even be an issue of product suitability based on the retiree’s financial profile and risk tolerance. The old adage that money can’t buy happiness, may just redefine the happiness factor in retirement with sources of guaranteed lifetime income.
Nationally syndicated financial columnist Steve Savant interviews Tom Hegna, popular platform speaker, retirement expert and best selling author. Tom has two retirement books entitled Don’t Worry Retire Happy and Paychecks and Playchecks. Tom has also hosted the PBS Special, Don’t Worry Retire Happy.