Our July 2025 Newsletter: 62% of Retirees Don't Know How Long Their Money Will Last

62% of Retirees Don't Know How Long Their Money Will Last

Schroders conducted a survey this spring, revealing that a growing number of retirees in the United States have major concerns about whether their retirement savings will last as long as they need it to. 62% of those surveyed admitted to not having any idea how long their savings will last.

The top five financial concerns for American retirees are:

1.  Inflation lessening the value of assets: rising prices on essentials have diminished purchasing power and financial stability of retirees

2.  Higher than expected healthcare costs: 58% of retirees expected Medicare to have covered a greater portion of their healthcare expenses

3.  A major market downturn significantly reducing assets

4.  Not knowing how best to take retirement income: We recently provided a withdrawal guide in our March newsletter – click here to read it.

5.  Outliving assets

36% percent of those surveyed are concerned that financial stress and worry is going to impact their overall health, and 64% don’t work with a professional financial advisor. Deb Boyden, Head of U.S. Defined Contribution at Schroders says, “The path to closing the retirement savings gap is paved with better planning, products, and access to advice. As pension plans continue to be replaced by defined contribution plans like the 401k, the importance of being proactive in saving and planning for retirement can not be overstated. It’s one of the greatest challenges and opportunities facing plan participants and the firms striving to provide solutions that can improve their retirement readiness.” 

To read the entire Schroders Article, click here. Are you concerned about your retirement savings lasting as long as you need it to? Call our office to schedule a meeting and we’ll get started on a plan! (518) 584-2555

Is a Roth Conversion Right For You?

We’ve heard a lot of talk lately about converting traditional IRAs to Roth IRAs, and while this is a great option for some people, it’s not right for everyone.

Before you embark on a Roth Conversion, you should consider these factors:

·     Roth Conversion Requires the Right Tax Conditions:

Taxes on funds transferred from a tax-deferred account to a Roth could be substantial, so you want to temper the tax liability as much as you can. This potentially means your Roth conversion may need to be planned out annually over several years.

·     Income Levels & Timing:

The amount of funds you are converting could bump you into a higher tax bracket if they are all transferred in the same year. It’s very important to realize that this higher income from a Roth conversion can increase your Medicare premiums.

·     Longevity & Financial Goals:

The converted funds may need to sit in the Roth account for years before posting gains that put you financially ahead of where you would have been had you left the funds in a tax-deferred account. It would be wise to make a calculation about your life expectancy and determine if that allows enough time to recoup the taxes you paid upfront for the conversion.

Click here to read the full article “Understanding the Pros and Cons of Roth Conversion.” If you have questions about whether you should convert your IRA to a Roth, call our office at (518) 584-2555.

Note: Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

3 Kinds of Hobbies that can Help Us Thrive

Whether you’re approaching retirement, or fully immersed in it, you’ve probably thought about the time you’ll have on your hands when you’re no longer working. What are you going to do with all that time? For some people, their lives get busier than ever after retirement, but some people struggle to fill all that new free time. Research shows that having one of each of these three types of hobbies leads to a truly enriching life:

·     A Hobby That Keeps You Moving

We all know the importance of getting enough exercise, but beyond keeping you physically fit, exercise can play a critical role in reducing stress and depression. Don’t love they gym or running marathons? Don’t worry! Something as simple as taking a daily walk or dancing in your kitchen while you cook dinner gets your muscles moving and blood pumping!

·     A Hobby That Keeps You Creative

There are so many ways to get creative – wood working, painting, playing an instrument, writing, knitting, baking… the list goes on and on. Even if you think you don’t have a creative bone in your body, you can reap the benefits of doing something creative. Studies show these types of hobbies can help you process difficult emotions, feel a greater sense of happiness and satisfaction with life in general, and feed our innate human need to create.

·     A Hobby That Keeps You Sharp

Are you familiar with the saying “If you don’t use it, you’ll lose it?” This is so true in regard to our cognitive resilience. Find a hobby such as logic puzzles or games, reading, or learning a new language to give yourself a mental workout – strengthening your memory and reducing the risk of cognitive decline.

Source: PsychologyToday.com

Did You Know: Consumer Confidence Index

Several of our recent SFS Insights have referenced the CCI, so we thought we’d give you a bit more background on the Index itself.

·     The CCI measures consumer sentiment regarding current and future (next six months) economic conditions based on data collected from the results of the Consumer Confidence Survey.

·     The Survey has 5 questions, collected from 3000 households each month, focusing on:

·     Current business conditions

·     Current employment conditions

·     Future business conditions in the next six months

·     Future employment conditions in the next six months

·     Future total family income for the next six months

·     It seeks to track whether consumers feel optimistic or pessimistic about the following three areas: 

·     The economy

·     The labor market

·     Their own financial position and spending habits

·     It’s updated and released on the last Tuesday of each month at 10 am ET.

·     It’s generally considered a leading indicator, meaning it’s looking toward possible future economic conditions based on how confident consumers feel right now. As a qualitative measurement, it can be used to monitor consumer feelings towards the economy and serve as a potential warning sign for what’s to come. 

Source: Motley Fool Wealth Management

And.... They're Off!

Summer, and all the excitement it brings, has arrived in Saratoga Springs! It’s a beautifully busy season featuring horses, music & theater, delicious food & drink… there is literally something for everyone!

Here are a few local events you may want to add to your calendar:

·     July 4^th Racing Festival at Saratoga Race Course; happening July 3^rd through the 6th

·     NYC Ballet presents Coppélia, one of the greatest comic ballets of the 19th Century, runs July 9^th through 12^th at SPAC

·     Opening Weekend 2025 at Saratoga Race Course begins July 10th

·     Home Made Theater presents ‘1776 the Musical’ the weekends of July 18^th & 25^th

Click here to check out the entire local events calendar!