Retirement News with Professor Craig

Retirement News with Professor Craig

The Retirement News blog is dedicated to the financial and physical health and well-being of older Americans. 
Whether you're already in or nearing retirement, you will find important, topical information in the blog to help you make informed decisions on your road to retiring more freely.
As a 25-year veteran in the financial services industry and a certified trainer and teacher, Professor Craig's #1 goal is to help you thrive in retirement with financial peace of mind. 

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With Inflation Rising, Here’s How to Keep Your Retirement Strategy on Track
Retirement News, Financing Retirement, Retirement Planning

With Inflation Rising, Here’s How to Keep Your Retirement Strategy on Track

Inflation in the U.S. returned to a 40-year high in May, exceeding 8% — significantly above the Federal Reserve’s 2% target.

These are worrying numbers for anyone trying to save  for retirement, because if your investment returns aren’t keeping pace with the inflation rate, you're potentially losing value even if you’re showing gains.

That’s why, regardless of how old you are or how close to retirement, it’s important to understand the types of risk you’ll face post retirement, according to Wade Pfau, PhD. “There are many unknowns in retirement,” he says. “How much can I spend when I don’t know how long I’ll live? What will market returns be? It’s a complicated problem.”

Dr. Pfau, RICP Curriculum Director and Professor of Retirement Income at the American College for Financial Services, has long studied the complexities of retirement income, including the key retirement risks we face and the best ways to structure retirement assets to make the most of them.

It all starts with goals

Not everyone has the same goals or vision for their retirement. Dr. Pfau, the author of The Retirement Researcher’s Guide Series, says that retirement financial goals can be described as what he terms “the four Ls”:

Lifestyle goals

How do you envision spending your free time in retirement? Will you travel the world, visit family and friends, or focus on learning new skills?

Discretionary activities like these have associated costs, so identifying your lifestyle goals is the first step to knowing how much you’ll need to save.

Longevity goals

Though no one can predict exactly how long they’ll live, what can be predicted are essential fixed expenses such as housing, food and healthcare. These “need to have” items must be covered regardless of the market performance of your retirement savings portfolio.

Many credible online sources have retirement calculators to help you estimate and budget for future essential expenses.

Legacy goals

A legacy is not only about what you’ve earned financially. It’s also the wisdom you’ve gained and experiences you’ve had over the course of a lifetime, and want to share with the ones you love.

Legacy planning is thinking ahead about what’s important to you, and the most meaningful way you can share that with your heirs or beneficiaries.

Liquidity goals

Liquidity addresses the many retirement unknowns referenced above by Dr. Pfau.

He explains, “Liquidity goals are available resources that are not earmarked for any of the other three financial goals. They provide true liquidity in the sense that they can be spent without sacrificing the ability to meet your lifestyle, longevity or legacy goals.”

One often-overlooked factor when mapping out the “4 Ls” is the home equity held by many older homeowners. In fact, homeowners ages 62 and older as a group hold $9.2 trillion in home equity wealth — and a reverse mortgage allows you to tap into that equity while you *continue to live in your home.

Several types of reverse mortgages exist, but they’re not right for everyone. See how a reverse mortgage might play an important role in your retirement strategy by downloading the Retire More Freely guide.

This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.5-star / Excellent score on Trustpilot4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.

*As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and keeping your home in good condition.


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A More Flexible Home Equity Loan

If you’re 62 or older, there is a home equity line of credit option that offers greater financial flexibility than a traditional Home Equity Line of Credit (HELOC). It’s called a Home Equity Conversion Mortgage (HECM) line of credit. 
If you have an existing mortgage or home equity loan you could refinance them with a HECM line of credit and get enhanced benefits, including a flexible payment feature and a line of credit that GROWS when left untouched.
As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and keeping your home in good condition.

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