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  • Posted March 11, 2022

Economic Factors Today’s Retirees Need to Worry About

Retiring is an exciting prospect for everyone. No longer having to work day in and day out to support your quality of life and finally having your time as your own to explore the world, your hobbies, and interests to your own whim is an incredible idea. But for your retirement to pan out as you have it in your mind, you need to have your financial preparation squared away properly, to make your money last you your life, and to keep as much of it as possible. Our certified financial planner provides three economic factors today’s retirees need to worry about to get the most from their retirement.

Sequence of Returns

The first economic factor that today’s retirees need to worry about to get the best retirement is the sequence of returns. Sequence of returns is a concept that is basically ignored during the investing stages of preparing for retirement but becomes crucial when you start taking distributions. The sequence of returns dictates that market returns in the first few years of your retirement can greatly impact the longevity of your accounts. If the market drops by a huge amount in the first year you are taking distributions rather than making contributions, your portfolio can dwindle quickly. The best way to handle sequence of returns is to stick to a 4% withdrawal maximum every year.


The next economic factor today’s retirees need to worry about is inflation. Inflation is the result of an excess supply of money in the market, which decreases the relative value of the dollar, making consumer goods more expensive. Inflation can hamper your retirement years, as the money you are withdrawing has lower purchasing power than previously thought. Gold tends to increase in value as the dollar decreases. Having some of your investment in retirement in gold or other precious metals can hedge against inflation states our certified financial planner

Uncertain Government Policy

The final economic factor that today’s retirees need to worry about is uncertainty in government policy. While Social Security has been able to offset some of the costs of retirement for retirees, Social Security is starting to dry up. This could and likely will result in decreases to retirement benefits from social security that you need to be prepared for. Don’t count on the government to have your back and be prepared to save all the money you will need for retirement on your own.

Your retirement is serious business. The ability to retire well is almost entirely dependent on the economic factors that you need to navigate. Make sure you understand these three different factors and how they will affect your retirement so you can plan most effectively. Talk with a certified financial planner to help you with planning.

Check out this article on how financial planners can help you avoid trouble when dealing with insurance companies!

Contact Tenpath Financial Group for certified financial planning services.