Markets aren’t cheap / returns could be lower. Stocks that may have earned high returns in the past have no guarantee that they will continue to do so in the future.
Interest rates and bond yields are historically low. Those who count on traditionally “safe and reliable” investments may find themselves on a paradoxically dangerous path in a volatile, uncertain, complex, and ambiguous environment.
We’re living longer. Modern Americans live twenty-five years longer than they did a century ago. Clearly that’s an enormous sign of progress. But with that progress comes new kinds of challenges. How do we ensure a high quality of life across that quarter century given that the retirement age has remained relatively constant?
Healthcare costs are increasing. The United States has the best healthcare system in the world, but it’s extremely expensive and getting more so. In addition the older we get, the more we spend on healthcare. We estimate that about 15% of the average retiree’s annual expenses will be used for health care-related expenses, including Medicare premiums and out-of-pocket expenses.”
Social Security, Medicare, and other government programs may not be able to provide the level of support they have in the past. The number of program beneficiaries is rapidly outpacing the number of program contributors. When Social Security was developed, people lived about seven years after retirement, so the government didn’t need a lot of capital to fund that period. Today the interval has increased to roughly thirty years.
Being unprepared, underfunded, or unguided may make behavioral mistakes in pursuing the illusion of safety. My clients have lived through two scary downturns in a little more than a decade: the tech bubble bursting from 1999 to 2002 and the great financial crisis from 2007 to 2009. As a result they’re feeling beaten up and anxious. Those emotions don’t provide a solid foundation for making astute investment decisions that will see them past the opening act in their lives.
The importance of finding a qualified professional to help you on your own life’s journey has never been so necessary as it is today.