Finances in Retirement - Investments

3 Tips for Financial Security in Retirement

by Alli Thomas

Apr 19, 2024

Financial security in retirement is one of the biggest concerns for workers of all ages, particularly those approaching retirement.  

You can take many steps during your working years to build a financially secure retirement, such as starting to save at a young age or taking advantage of employer-sponsored retirement plans.  

But while those are somewhat age- and situation-dependent, here are three tips that can help improve your financial security in retirement regardless of where you are in life: 

1. Be proactive about your health. 

In a 2021 survey by the Employee Benefit Research Institute and Greenwald Research, 34% of respondents said they had retired early due to a health problem or disability, with the figure increasing to 40% for Black and Hispanic respondents. 

Healthcare costs are one of the biggest threats to financial security in retirement. With retirees’ increased longevity, poor health increases the potential need for pricey long-term care. 

Staying active and visiting your doctor for regular preventative care can reduce the risk of significant unplanned healthcare expenses. This will help you detect potential problems early and avoid having to retire due to poor health. 

Read more: Longevity and Financial Planning.

2. Save for your retirement first.

According to a Merrill Lynch research report from 2018, 72% of parents said they had put their children’s interests ahead of their own need to save for retirement, and 63% of parents reported having sacrificed their financial security for the sake of their children, including pulling money out of savings and retirement accounts and taking on debt. This is hazardous to long-term financial security and should be avoided, especially as you get closer to retirement.  

Having a large debt will not only impact your ability to save for retirement, debt payments could also substantially impact how much money you have to live on every month after you retire. While wanting to help your children (or other family members) is completely understandable, you shouldn’t put your retirement at risk in the process, especially if the person (or people) you’re helping is an adult. 

3. Work with a financial advisor.

According to a 2021 survey from Allianz, most respondents said they are not getting professional help with their finances, with “don’t have enough money” and “costs too much” cited as the most common reasons. 

However, working with an advisor is likely to help with both issues. Professional guidance can not only help you save more money (and not just for retirement) but also pay for itself through better money management. 

An advisor is obligated to act in your best interest at all times. They can help you understand your budget and retirement goals.  

Referring back to tip #2, an advisor can help you set boundaries with your family and ensure that you prioritize your own financial security—you can’t take care of everyone else if you don’t take care of yourself first. An advisor can also help you build generational wealth, which, in the long run, is the ultimate form of taking care of your family. 

If you’d like to speak with a financial advisor to learn more about how financial planning can help you be financially secure in retirement, click here to schedule a free, no-obligation meeting.

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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