Other Writings Archives • Rutherford Investment

Reducing The Risk Of Outliving Your Money

What steps might help you sustain and grow your retirement savings?

“What is your greatest retirement fear?” If you ask any group of retirees and pre-retirees this question, “outliving my money” will likely be one of the top answers. In fact, 51% of investors surveyed for a 2019 AIG retirement study ranked outliving their money as their top anxiety. ¹

Retirees face greater “longevity risk” today. The Census Bureau says that Americans typically retire around age 63. Social Security projects that today’s 63-year-olds will live into their mid- eighties, on average. This is a mean life expectancy, so while some of these seniors may pass away earlier, others may live past 90 or 100.^2,3

If your retirement lasts 20, 30, or even 40 years, how well do you think your retirement savings will hold up? What financial steps could you take in your retirement to try and prevent those savings from eroding? As you think ahead, consider the following possibilities and realities. Realize that Social Security benefits might shrink in the future. For decades, Social Security typically took in more dollars per year than it paid out. That ongoing surplus – also known as the Social Security Trust Fund – is now projected to dry up by 2035. Congress may act to address this financing issue before then, but the worry is that future retirees could get slightly less back from Social Security than they put in. It may be smart to investigate other potential retirement income sources now. ⁴

Understand that you may need to work part time in your sixties and seventies. The income from part-time work can be an economic lifesaver for retirees. What if you worked part time and earned $20,000-30,000 a year? If you […]

The Wizard Of Was

The three little pigs and the big bad wolf (a fable)

Published in Brainstorm Northwest, November 2008

Once upon a time there was a happy community. In the community there lived a Wizard. Some called him the Maestro, others called him an Oracle. In any event, he was called on from time to time to make Big decisions. These decisions involved the land in which he and the little people lived. The Big decisions usually involved money but sometimes they involved how the money was priced, who got the money, and how those who received the money used it. Because these decisions were so Big, sooner or later they affected everyone in the land — not always for the better.

As it happened, the land fell on hard times because decisions made by the Wizard were wrong. Businesses were failing, and people were losing their jobs, savings and retirement accounts. The prices of companies were falling along with the price of just about everything else, except food and energy. (At an earlier time, the Wizard had said the food and energy didn’t count, so don’t pay attention to them.) […]