The U.S. Postal Service announced price increases for 2023. The cost of a postage stamp will increase from 60 cents to 63 cents. That's a 5% increase! What lesson can we learn from a postage stamp that also applies to your retirement plan?
What Lesson Can We Learn From A Postage Stamp?
A nonsmoking couple of average retirement age, which is 62, has a joint life expectancy today of 30 years. That means there is a good chance one of you is living to age 92 and will be in retirement for 30 years.
We all know about inflation and how it it is the silent killer of your retirement plan and the example of this stamp will show us why. That stamp pictured above will cost you $0.63 cents today. That same stamp in 1993, which is 30 years ago, would have cost you $0.29 cents. (See Elvis stamp above) In a span of 30 years the cost of a stamp has more than doubled.
With inflation averaging 2-3% per year, you can literally plan on your cost of living doubling throughout your retirement. If you need $50,000 per year right now to live comfortable, you will need $100,000 per year in 30 years to maintain the same standard of living.
Remember money equals purchasing power. They are the same thing.
Retirement Only Has Two Possible Outcomes
1. Your money outlives you. This outcome leads to dignity, independence and creation of legacies.
2. You outlive your money. This outcome leads to regret, dependence on family and government, and death of any legacy you might want for your family.
If you don’t have a plan to double your income in retirement then, without realizing it, you actually have made a decision to choose outcome number 2.
The real risk in retirement is losing your purchasing power. Your money must grow at rate higher than inflation for the next 20-30 years or without realizing it you have made a plan to run out of money.
Successful investing during a 20-30 year retirement MUST be a quest to maintain and increase your purchasing power. What is YOUR plan to invest your retirement money so that inflation doesn't cut your purchasing power in half during a 20-30 year retirement?
At 80/20, our mission in life is to help people make a plan so they don’t lose purchasing power in retirement. It's a much shorter and less complicated conversation than you think and I would be glad to have that conversation with you.
You Need A Plan
A goal of retiring - without a plan - is simply a plan to run out of money. At 80/20 Financial Services we specialize in helping cooperative employees plan their retirement. We can show you how to turn your 401k and your R&S lump sum into a stream of income just like when you were working while also helping you achieve your desired financial outcomes in retirement.
If you are retired or nearing retirement, we can create a plan which will outpace inflation and accomplish any other retirement goals you might have. The consultation is free and without obligation. Contact us to set up a consultation.
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80/20 Financial Services is an Independent Registered Investment Advisor (RIA) registered in the state of Missouri (CRD# 300772). Being independent allows us to work exclusively for YOU. 80/20 Financial Services is the legal name of our Registered Investment Advisory Firm (RIA). Electric Cooperative Retirement Planning is what we do. Our specialty is retirement planning for electric cooperative employees within 5 years of retirement or already retired.