Inflation, Spousal, and Longevity Plan
Inflation, Spousal, and Longevity Plan in Greenville, SC
Planning for retirement means planning longterm security. Since no one knows what the future holds, it’s on you to think through the variables of your retirement to ensure that funds don’t run out.
The key to retirement is a plan that accounts for every major variable. That includes an inflation plan, a longevity plan, and spousal planning.
This page shares information on how to approach these key variables of your retirement plan.
Understanding Inflation Protection
Inflation is one of the most unpredictable factors in retirement. If your retirement income can’t keep up, you may find yourself cutting back on your lifestyle or making sacrifices. Don’t despair though — there are ways to mitigate the impact of inflation. It all depends on planning, diversifying income streams, and finding smart ways to save.
Some ways to account for inflation in retirement planning are:
- Social Security
- Investments
- Pensions
- Annuities
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Social Security
Social Security offers annual cost-of-living adjustment (COLA).
Investments
IRA or 401k investments aren’t adjusted for inflation, but you can adjust how much you withdraw to help cover rising inflation costs. Increasing how much you withdraw each year by a similar percentage to inflation is one way to give yourself your own annual COLA (if you plan correctly).
Alternatively, investment options like I Bonds or TIPS (Treasury Inflation-Protected Securities) are designed with inflation in mind. Talking to a financial planner about these options can offer more insights.
Pensions
Many public-sector pensions offer a COLA for beneficiaries. Not all pensions offer a COLA, especially from private companies. Even if your pension does adjust benefits, there’s also no guarantee it will keep up with inflation rates.
Annuities
Some annuities include a COLA to help protect against inflation for beneficiaries. Keep in mind that an annuity with a COLA may have other downsides though, like lower payout sums or higher fees.
As you can see, there are options when planning ahead for inflation. It’s always a good idea to talk to a financial advisor to help ensure that your retirement plan takes into account this key variable.
Spousal Planning: Securing Your Partner's Future
Thinking through spouse benefits and how they could be affected by an untimely passing is an important part of planning for retirement.
Depending on your income and assets, you may be able to set up a spousal trust — more commonly called a SLAT (spousal lifetime access trust). A SLAT is a form of irrevocable trust that allows you to make a gift that benefits your spouse (or other family members) and remove that amount from the combined estate. This has many benefits.
SLATs allow one spouse to take advantage of the federal lifetime gift and estate tax exclusion (currently $12.92 million) while still keeping limited access to the funds in the trust. It allows a couple to reduce the size of their estate without sacrificing total control of their assets.
As long as the non-donor spouse is living and married to the donor spouse, the donor may indirectly benefit from these funds. A SLAT can potentially allow the assets to grow.
For lower income spousal planning, we recommend speaking with a financial planner about whether to set up an outright transfer of assets or a trust to cover their retirement needs.
Longevity Planning: Preparing for a Longer Retirement
Living longer means more variables to consider during retirement — like transportation, healthcare, housing, mobility, and more. As more people live longer lives, retirement planning needs to keep up.
Longevity planning turns traditional retirement on its head, since life after 65 isn’t always just about leisure and relaxation these days. Now, the goal is to ensure high quality of life and help retirees get the most out of their long lives.
TruNorth’s Services
At TruNorth, we understand the complexity that comes when planning for retirement. That’s why we offer services to help you account for these aspects of retirement planning.
Inflation Protection Solutions
Plan ahead for inflation to ensure that your retirement income protects against rising costs.
Spousal Financial Security
Put a plan in place for your partner or loved ones to recieve your assets after your passing.
Longevity Income Planning
Long life and prosperity aren’t mutually exclusive! Plan for your retirement with TruNorth.
Work with TruNorth Advisors
TruNorth Advisors is passionate about providing the information you need for retirement. We work with our clients to assess risks, understand retirement income, potentially maximize tax benefits, and develop a longterm financial plan.
Contact TruNorth Advisors to start your retirement plan.