Brad Rhodes

Brad Rhodes Financial

Future Income Needs and Why We'll Require More than We Anticipate

As time passes, it becomes abundantly clear that planning for the future is more than simply investing wisely and setting aside a fraction of your income for retirement. It's about understanding the complex factors that directly impact your financial well-being, from skyrocketing healthcare costs to the insidious creep of inflation. There are also longevity risks to consider - the fact that we're living longer than ever - and the equally looming threat of market volatility. These factors collectively dictate that we will need more income in the not-so-distant future, sometimes much more than we currently anticipate.

For starters, let's talk about healthcare costs. The price tag attached to health care is not static; it's dynamic and continuously evolving. As it stands, Medicare costs, Part B premium increases, prescription costs, and long-term care costs are on an upward trajectory. Over the past two decades, the Consumer Price Index (CPI), a measure that tracks the typical variations in prices that city dwellers pay for a range of goods and services, has increased by an annual average of 2.4 percent. Meanwhile, the CPI specific to medical care services has experienced a higher annual average growth rate, registering at 3.4 percent. Add to that the stark reality that about 70% of individuals over 65 will require some form of long-term care at some point in their lives. As we live longer, the odds of requiring long-term care services (also rising in cost) increase, leading to ballooning healthcare costs that can quickly deplete hard-earned savings.

While the rising cost of healthcare looms large, we must also grapple with the silent thief - inflation. Inflation erodes the purchasing power of our money over time. What a dollar can buy today; it might not be able to buy tomorrow. Presently, we're in a period where inflation is on the rise. The future may hold much of the same, meaning our future selves will need more money for the same goods and services.

Living longer, while a testament to advances in health care and quality of life, presents another financial risk - longevity risk. The risk of outliving our savings is genuine. We're witnessing an era where many live well into their 90s and beyond. As our life expectancy increases, so does the time we need our money to last. It's crucial to have a financial plan that accounts for this longevity, ensuring we don't exhaust our resources too soon.

Finally, let's consider market risk - the possibility of investors experiencing losses due to factors that affect the overall performance of the financial markets. We've all seen how market volatility can quickly erode our savings. One lousy market downturn can drastically shrink the savings we've worked years to accumulate.

It's essential to approach these complexities with a comprehensive plan, and the proper tools designed to withstand the challenges of rising healthcare costs, inflation, longevity risk, and market instability.

Ready to secure your future? Take the first step towards a stable retirement today. Contact a financial advisor and discover how safe money products can be integrated into your financial plan, helping to ensure you have the resources you need precisely when you need them most. Don't leave your financial future to chance - plan, prepare, and prosper.

  • Rising healthcare costs and inflation significantly impact future income needs. As medical expenses and the cost of living rise, we'll need more money to maintain the same standard of living.
  • Longevity risk (outliving savings due to increased lifespan) and market risk (potential losses from market volatility) further exacerbate future financial needs.
  • It's essential to prepare a robust financial plan addressing these challenges. Seeking advice from a financial advisor and incorporating safe money products can help safeguard our financial future.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

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Brad Rhodes

Brad Rhodes Financial

255 Morning Star Ln.

Lexington, North Carolina 27292

(336) 746-4729

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