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OMPARED TO PREVIOUS GENERATIONS, today’s retirees not


only live longer, but they also expect to live better in retirement. However, some workers approaching what they thought would be retirement age have discovered they’re too out of shape financially to leave the workforce. According to professional financial planners, clients should aim to have adequate inflation-protected retirement income at the appropriate age and for full life expectancy, conservatively estimated — in other words, finan- cial independence in retirement, no matter how long you live.


A common concern With longer life expectancy, one of the greatest fears of many current and future retirees is their longev- ity risk. Along with declining health and the loss of a spouse, the risk of going broke in retirement ranks high among retiree stressors. Some argue accumulating and maintain- ing the financial resources neces- sary to enjoy a long and comfortable retirement is getting harder. In this sluggish economy, many


baby boomers and younger people face the loss of guaranteed pen- sions, dwindling equity in their homes, and declining confidence that Social Security and other government benefits will be there when they need them. Stock and


68 MILITARY OFFICER SEPTEMBER 2011


bond markets remain too volatile for some retirees’ risk tolerance. CDs and money market accounts, historically popular with retirees, now are paying paltry rates of re- turn. What’s a retiree to do?


Determine your needs If you’re still in the workforce and planning for your retirement, a lot can be done to get your finances in shape. One of the main things you need to determine is how much money you will need in retirement. While some retirees’ financial needs increase in retirement, oth- ers’ needs decrease. Common financial adjustments


in retirement include elimination of Social Security and Medicare taxes;


fewer work-related expenses, such as commuting costs and dryclean- ing; increased health care insurance costs; and increased property taxes (due to inflation).


PHOTO: SHUTTERSTOCK


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