Topic 1 – Will You Outlive Your Money?

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Okay. As we move into module three, now we want to talk more about the possibilities, probabilities, risks and issues of possibly running out of money in retirement. And how can we plan for those issues so that we do avoid the risks that are involved with these decisions that are critical to your income planning for the future. Will you outlive your money? A big question. Let’s talk a little bit about this hypothetical example. Charles is a 91 year old retiree who lives in Florida. Charles, like many others had been counting on his retirement savings to last until he died. The odds are unfortunately moving against him. You see, Charles problem is, is with short term bank CDs paying around 1%, the military veteran expects that as a remaining $50,000 stash will yield just a few hundred dollars of interest this year. Charles estimates that his retirement savings will be depleted in about six years. So Charles is 91, but now he says I can only live till 97. But the doctors say I have a really good chance of making it to age 100. At his current rate of withdraw, Charles is going to have to make an adjustment in his rate of withdrawal or his expectations as to how long his money will last.