On June 17, 2020

Certain uncertainties in retirement

By Kevin Theissen

The uncertainties we face in retirement can erode our sense of confidence, potentially undermining our outlook during those years.

Year after year, few retirees say they are very confident about having enough assets to live comfortably in retirement. And more are either not too confident or not at all confident.

Today’s retirees face two overarching uncertainties. While each on their own can lead even the best-laid strategies to go awry, it’s important to remember that remaining flexible and responsive to changes in the landscape may help you meet the challenges of uncertainty in the years ahead.

An uncertain tax structure

Covid-19 stimulus funding, mounting national debt and the growing liabilities of Social Security and Medicare are straining federal finances. How these challenges will be resolved remains unknown, but higher taxes—along with means-testing for Social Security and Medicare—are obvious possibilities for policymakers.

Whatever tax rates may be in the future, taxes can be a drag on your savings and may adversely impact your retirement security. Moreover, any reduction of Social Security or Medicare benefits has the potential to place a further strain on your retirement.

Consequently, you’ll need to be ever mindful of a changing tax landscape and strategies to manage the impact.

Market uncertainty

If you know someone who retired, or looked to retire back in in 2008, you know what market uncertainty can do to a retirement blueprint.

The uncertainties haven’t gone away. What will be the lasting impacts of the pandemic? Are we looking at the possibility of negative interest rates? How will political issues impact the economy? Will the U.S. debt be a drag on our economic vitality?

Over a 30-year period, uncertainties may evaporate or resolve themselves, but new ones historically have emerged. This means understanding that the solutions for one set of economic circumstances may not be appropriate for a new set of circumstances.

Scottish philosopher Thomas Carlyle said, “He who could foresee affairs three days in advance would be rich for thousands of years.” Preparing for uncertainties is less about knowing what the future holds as it is about being able to respond to changes as they unfold.

Kevin Theissen is the owner of HWC Financial in Ludlow.

Do you want to submit feedback to the editor?

Send Us An Email!

Related Posts

Moving sticks and rocks

May 22, 2024
By Merisa Sherman Then the tough choice of how to play today:ski, bike, paddle, fish, hike, run?  The bug went down my throat. Literally, flew down my throat and landed in the back at such speed that I had no choice but to just swallow. Mmmmm, gotta love that extra protein that Vermont provides during…

What are the chances?

May 22, 2024
Vesna Vulovic is a name etched in the annals of miraculous survival — perhaps the most unlikely survival story of all time. She was thrust into the spotlight on Jan. 26, 1972, when she unwittingly became a symbol of human resilience.  A native of Belgrade, Yugoslavia, Vesna’s journey to that fateful day began like that…

The Outside Story: Jesup’s milk-vetch: A rare beauty

May 22, 2024
A few ledges along the Connecticut River are home to a rare plant commonly known as Jesup’s milk-vetch (Astragalus robbinsii var. jesupii). In fact, this species, which has been listed as federally endangered since 1987, only grows at six sites along a 16-mile stretch of the river in New Hampshire and Vermont. But conservationists are working…

Boys, brothers, dad, Vermont

May 22, 2024
Building a Killington Dream Lodge: part 14 By Marguerite Jill Dye Dad made progress and forged ahead on our Killington ski lodge while Mom, Billie, and I toured Europe. Our extensive European whirlwind trip was the very beginning of my awakening to understand the world and how I fit in. I had no idea what…