How to Aim for a Worry-Free Retirement

I read an article a few nights ago that described what’s happening right now in the world. You may be unaware of this, but America is experiencing a retirement crisis. Part of this is because the stock market has not been cooperating. Part of it is because Americans often don’t save enough for retirement. The last part is we don’t want to work very long, but we want to live a long time in retirement. It is our concern that many will not have enough income to support the lifestyle they want in retirement.

Financial advisors, I feel, are training to grow and accumulate money. If an advisor does not know the different ways to protect what you’ve worked hard to build, or how generate income, then I don’t think you have a very good advisor. Your retirement phase is different from your growth and emulation phase.


I found an article that captures the situation well. The headline states, “75% of retirees fall short of a key retirement income goal.” Imagine waking up in the morning and not needing to worry about your retirement income being there. You’d always know that your income was there and that you had enough. Instead of worrying about money, you could focus on your day and do what makes you happy. How awesome would that be? According to this article, 75% of retirees aren’t living that life. That statistic is sad. I want to help you get closer to a point where you can wake up in the morning and know your retirement is taken care of and you have enough money to live the lifestyle that you want to live. How are you going to get to that goal?


According to the article, to maintain your standard of living in retirement, the rule of thumb is that you need to replace at least 70% of the income you had while you were working. For example, if you’re making $10,000 per month while working, they’re saying you’ll only need $7,000 per month in retirement.


The first assumption behind this is that you’ll be saving 10% of your income. If you’re making $10,000 a month, you’re saving 10%, which is $1,000. In retirement, you don’t need to save anymore! Your monthly expenses are already down from $10,000 to $9,000.


The second assumption is that there are many work-related expenses that you’ve been paying for, like transportation. Experts think that, without those expenses, you’ll be able to get by on 70% income. I think that number is a little low. In almost 28 years of retirement planning, I’ve worked with a lot of people who would like to have more than that. I think that number should be closer to 80%. Regardless of my opinion, the industry standard is 70%. Let’s use that as the minimum; even with that low bar, many retirees fall short of their retirement income goal!


The article I’m referring to cites research from Goldman Sachs Asset Management, which surveyed 1,566 people in the United States.  They took the poll between July and August 2022. Here’s what they learned; of the people they talked to, only 25% of retirees are generating a retirement income of 70% or more of their pre-retirement income. More than half the respondents had to reduce their income by half or more in retirement. If they were making $10,000 per month while working, they had to live on $5,000 or less per month in retirement.


The article explains that this number isn’t surprising, considering that more than 40% of those still working say they are behind schedule on their retirement savings. Members of Generation X are 50% behind on their retirement savings. People aren’t saving enough, and when they retire, they realize that their income isn’t even close to what it was before.


Think about what the goal is. When you’re working, you save money through your company with a 401K. The reason you’re saving money is so you can retire comfortably! Imagine that you save money for 20, 30, or 40 years, only to go into retirement and find that you are living on less than 70%. That’s not a good place to be!


Every person I talk to who wants to retire also wants to retire with a similar lifestyle to what they have now. In other words, they want the same lifestyle without working anymore. This article says that only 25% accomplish that objective.


You probably want to be in that 25%.  I’m sure we would all like to switch those numbers around and have 75% of people retire with their standard of living. I’d love it to be 100%! A key aspect of seeking a secure future is to plan the right way. At Centennial Advisors, we help people retire RIGHT. RIGHT is our acronym for the five critical areas of retirement planning: Risk, Income, Growth, Healthcare, and Taxes. We feel that these bases should be covered. If you’ve recently retired and don’t have enough income, or if you’re approaching retirement and worried about income, we can set you up with an advisor who can help you maximize your lifetime income in retirement. Our number is 512-886-5850.


Ultimately, retirement planning is all about waking up in the morning knowing that your base lifestyle is covered, and you don’t have to worry about it any longer. If you’re not at that point yet, we want you to give us a call and let us help.





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