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Medallion Financial Group

Will You Outlive Your Money?

There are far more seniors living today than ever before. As a group, they are more active, healthier and more involved than any previous generation. However, this longevity and active lifestyle, which most of us call “livin,’” is expensive.

In fact, with gas and food prices on the rise, Americans’ disposable income is under a nasty strain. Furthermore, the increases in medical expenses, including those involving nursing home costs, make the gas price increases look positively skimpy. The Academy of Health states that although 50% of retirees will not spend anything on long-term care during their lifetimes, 6% of retirees will spend at least $100,000.

Naturally, with these types of costs staring you down, it’s easy to become fearful for your money.

Will your money last your lifetime or will you spend your final years broke?

Careful planning and knowing the value of diversified investing may help your chances of maintaining income for life. It is important to note that these suggestions are for educational purposes only.

For specifics as to how our ideas might work for you, please consult your financial and/or tax advisor.

So, with the ground rules established, let’s have some fun answering one of your questions.


I’m afraid I’ll run out of money before I die. How can I make sure this fear doesn’t come true? Although I have no monthly pension from my job, I have managed to save about $200,000 from annual IRA contributions and systematic payments into mutual funds. Almost all these accounts are invested in the stock market.

Joan S., Hartford, Conn.


Joan, the only things certain in life are death and taxes, but in the United States we can also rely on monthly government payouts in the form of Social Security. These payouts are available to eligible U.S. taxpayers and serve as a safety net for retired citizens.

pictures of things you pay for in your homeWhat worries us is that almost all of your money is invested in the stock market. To help reduce the risk of running out of income in your lifetime, you should consider re-balancing your holdings.

A properly diversified portfolio can provide you some growth potential to outpace inflation. Obviously, any mix of assets you choose will depend primarily on your risk tolerance, objectives and time horizon.

Once you have made provisions by rebalancing, you should put yourself on a strict annual spending budget. Hopefully, your account can earn at least that much so that your principal does not decrease.

If after exploring this stock/bond strategy you still feel uncomfortable with the possibility of running out of money, you may want to consider an immediate fixed annuity. Of course, choosing the product that is right for you would ultimately depend on various factors present in your financial picture.

These products are not government insured, but are relatively safe and can be used to supplement your other retirement income. However, keep in mind that one of the negatives of many fixed annuities is that they do not keep pace with inflation. In addition, guarantees are based on the claims-paying ability of the issuing company.

Joan, best of luck, and remember that you should review your plan at least annually to make sure your goals, needs and portfolio value do not warrant a big change in strategy. Your money matters, so treat it wisely.

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Diversification and asset allocation may reduce some risks of investing, but do not guarantee a profit or ensure against a loss in a declining market, they are methods used to manage risk.

Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).

At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.

post icon in Retirement by Medallion Group Jan 12, 2015