Rethinking Retirement Financial Goals

We’re driven to outperform so retirees can dream big.

With lifespans increasing and the challenges of an aging population expanding, many people are changing their retirement goals. For example, some are needing their portfolios to shift to retirement income for a longer amount of time. At Athene, helping people live financially secure retirements is our top priority, and we provide many options that allow you to help secure the retirement lifestyle you want.

Lengthening lifespans and health care cost

We see increasing longevity frequently mentioned in the news and while a longer life is what many of us strive for, living past the average life span — which is oftentimes used as a guidepost for several aspects of our future needs — can come with significant challenges. All of us can probably agree that a dollar used to go a lot further than it does today. Inflation affects nearly every facet of our lives and is on the list of risks to a person’s retirement savings. As the price of goods and services continues to climb, you will need more of your nest egg to keep up with your cost of living. A longer lifespan can also mean a lengthier period of time in retirement — forcing you to stretch those dollars even further.

Retirees also need to plan for health care costs, which can significantly increase as we age. Not only does the probability and frequency of health issues go up in your golden years, but the cost of doctor visits, insurance premiums, deductibles and prescription drugs are projected to increase as well. For an average healthy 65-year old couple, where the man lives to 87 and the woman lives to 89, they can expect to pay $662,156 in total lifetime retirement medical expenses. Plus, if this couple lives an extra two years past their projected longevity age, they will incur an additional $104,900 in total health care costs.

You may already have a retirement age in mind and have set your saving goals accordingly, but keep in mind some retirees may stop working sooner than anticipated, with a change in health being a common reason. Creating a retirement savings plan that addresses both a need for lifetime income with a potentially fluid retirement date, is essential to helping you create lasting financial security. In addition, a successful strategy should take into account changing market conditions, because not only are lifetimes increasing, but market volatility has risen too.

Increased market volatility

After recent drops in the market, it’s not uncommon to feel uncertain about the economy and your long-term financial security. Not only has the crisis hit wallets, but it has the potential to upend many retirement plans too, especially if those plans do not have built-in protection from market volatility.

While growing your savings is important to a retirement strategy, protecting those hard-earned dollars is equally valuable. Fixed indexed annuities (FIAs), for example, can help you plan with confidence — knowing you’re protecting your savings, but also provide the potential for growth. Since FIAs are not directly invested in any stock or equity, you can pursue upside potential without sacrificing security. Then, once you reach retirement, you have a guaranteed stream of income you cannot outlive.

A sound retirement plan must be flexible, not only to meet your changing needs and life circumstances, and it must also address the changes in the world around you. In the past, an average life expectancy over age 90 seemed impossible, but researchers say that barrier no longer exists and we have yet to reach the upper limit. Plus, the global pandemic has put a spotlight on the number of households that are financially unprepared to meet their short- and long-term needs. Creating guaranteed income that is protected from retirement risks is more important than ever and can prevent you from ending up a “day late and a dollar short.” There’s no better time to start building the financial future you’ve always envisioned.