As Americans are living longer, it is becoming increasingly important to amass retirement funds that will last throughout those extended years. Yahoo Finance contributor Ross Mac breaks down five key financial tips to help prepare for a longer life.
So with Americans living longer, what are some steps to financially plan for a longer life?
Yahoo, finance contributor, Ross Mack has more.
All right guys, it’s your boy, Ross Mack of economics and look as life expectancies rise.
So does the importance of planning out our finances for an extended future?
Look longer life spans means that retirement funds need to last us a lot longer than they did before.
Therefore, guys, we have to shift how we approach our savings and investing.
So here are a few things to consider and some actionable steps to take to ensure that our retirement funds never ever run out first things first, I want you to actually re evaluate your retirement age for instance, right?
The life expectancy for healthy females is roughly about 80 years old.
So you need to ask yourself, do you have enough money saved for retirement that will actually last you till you get to 80?
Another thing, right?
What are your annual expenses using the fire rule which stands for financial independence, retire early.
You wanna have roughly 25 times your annual expenses saved for retirement in order to feel comfortable.
Now, look third, I want you to diversify your portfolio.
You wanna have a mix of safer assets and higher yielding assets that balances the risk and the returns that you want.
And look guys, it’s important to note that as you get older, you wanna shift your investment mix to safer investments.
Look guys, as you get older, that risk tolerance is gonna go down just because you don’t wanna have those volatile returns in your portfolio.
Fourth, I want you to take advantage of your retirement accounts, right?
Try your hardest to max out those contributions and your four one K and your rough ira.
Now, the biggest tip I always recommend is make sure that you’re maxing out your employer contributions.
And fifth and lastly, another thing to consider is that we’re living longer.
Guess what?
We’re also gonna mean that we’re gonna have higher medical costs.
So therefore, I want you to consider investing in the HS A account health savings account which offers you tax advantage ways to cover your medical expenses when it comes to retirement.
Hopefully, that helps you guys prepare for a longer life.