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Coming to Terms with Risk in your Retirement Planning

An independent financial advisor and wealth manager can help you decide upon an investment strategy and asset allocation that aligns with your time horizon, retirement goals and risk tolerance wherever you are in the world and wherever your assets are situated. Blacktower (US) LLC brings together the management of UK and US retirement assets in one holistic provision.

Here we examine the nature of risk, particularly in relation to “conservative” investments and shorter time horizons when planning for your retirement.

Retirement Planning in the Contemporary Context

If you read the financial sections of the newspapers you could be forgiven for thinking that younger people today are likely to be ill prepared for retirement and that there is little to nothing anyone can do about it.

However, there is no reason why, if a young person is able to put aside regular monthly savings and is diligent about how and where they invest them, they should not be able to adequately prepare for a financially free and secure retirement.

Are You Prepared for Medical Costs in Retirement?

How much money will you need for medical costs when you retire?

Unfortunately the medical costs burden is much higher than many might imagine: a 65-year-old couple retiring in 2019 in the US will need to have saved $280,000 between them in order to meet the health and medical costs they will face through their retirement years.*

Individual retirees face a similar financial burden: $150,000 for women and $135,000 for men. These figures contrast sharply with what people predict they will need: around half expect their medical costs will be below $100,000 and 33% said they have no idea how much they will need.*

Opening up About Money – Easy or Not?

How comfortable are you talking about money? A recent survey by KBK Wealth Connection found that 44%* of Americans would rather discuss religion, death or politics with a loved one than the practical details of their finances.

Whether it is through embarrassment or fear of upsetting the applecart, such reticence can have profound consequences on future financial security and especially on retirement plans. This is why it is vital that you find a financial advisor who you feel comfortable talking to – if you can’t discuss money with your partner or children, at least you should be able to discuss it with a professional.

Five Top Tips for Cross-Border Investing and Retirement Planning

The most important thing you can do as a either a resident alien or non resident alien in the US, or as an American citizen moving abroad, is to take advice in relation to your cross-border investing and retirement planning options.

Here are five top tips from Blacktower (US) LLC to help you ensure that you and your finances do not fall foul of the Foreign Account Tax Compliance Act (FACTA) and some of the more impenetrable facets of wealth management and retirement planning in the US.

Will you Need to Keep Working into Your Retirement Years?

A recently published study by Ipsos for the ING Group, ING International Survey Savings 2019, has cast some light on why it is so important that people take retirement planning advice early during their working lives.

The study found that 62% in the United States and 61% of people in Europe, are worried by whether they will have sufficient money in retirement.

Furthermore, only 30% of retired people in the US said they were able to maintain the same lifestyle they enjoyed pre-retirement, while only 24% of the non-retired said that they expected they’d be able to enjoy the same lifestyle.

Retirement Planning During Your Second Career

When the Social Security program came into force in 1935 the official retirement age in the USA was 65, yet the average life expectancy was 61*. Nowadays, average life-expectancy is around 76 years** and can be much higher among educated, healthy-living individuals, especially women.

Increased life expectancy creates a need for greater retirement assets in order to ensure sufficient income during retirement and one consequence of this is the advent of later-life careers while another is the increased imperative to plan early and to ensure a diverse portfolio of assets.

Should Investors Try to Time the Market?

It is easy to see why many retirement investors may be tempted by the prospect of timing the market: imagine if you could ensure that you only ever invested in stocks at the time when the market was rising and only ever sold at the time when it was cresting like a wave that is about to crash.

However, your chances of timing your trading to perfection are, in reality, likely to be comparable to predicting the jackpot numbers in the lottery and chancing your retirement savings in such a way is likely to be at best a risky proposition and at worst, a catastrophe.

The reality is that there is no scientific way to time the market. This is not to say that there are no strategies you can utilise in order to protect and grow your wealth, only that these are going to be less about timing and more about foresighted planning, i.e. investing early in order to enjoy long-term gains and having a well-diversified portfolio of retirement assets that is able to withstand the inevitable volatilities of the market.

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