Hi, it’s Peter Aquart from American Wealth Builders.
What are you afraid of?
I was curious so I Googled it and found an article in the Washington Post about the top fears in America (according to a study from Chapman University).
Topping the list is public speaking. (I’ve heard that before.)
And, there are a couple of fears that probably won’t surprise you – bugs, snakes, heights, flying, and claustrophobia.
I was frankly surprised at how high zombies were on the list of fears, although perhaps people are really just scared of what will happen in the season opener of The Walking Dead.
What isn’t reported on this list is a fear that starts when you retire. According to an article on Fox Business, recent studies (by TransAmerica, by the American Institute for CPAs, and by Allianz) found that a VERY large number of Americans feared that they would outlive their retirement savings.
The Allianz survey, for example, found that 60% of Baby Boomers were more afraid of outliving their retirement savings than they were of actually dying.
And to be honest, I think that number is low for a few reasons:
- It only asked Baby Boomers, not anyone else (such as retirees who are older than boomers, or the younger generations for whom retirement is still for away).
- Many Baby Boomers are still in the early stages of retirement and might have more optimistic ideas of what their costs will be.
- We already know that people can be blind to how much they actually need to live in retirement.
The problem of outliving your retirement savings is something we’ve frequently reported here at American Wealth Builders, but it’s only a problem because of a very popular traditional mindset among American workers and retirees.
It’s a mindset that has persisted for so long that it’s ingrained into our thinking and often thought of as the only way to save for retirement.
This “broken” way of saving for retirement works like this: most people work for about 45 years (from about the age of 20 to about 65), saving a portion of their income and investing it wisely. And then (they hope), they’ll have saved enough of a lump sum to retire on, at which point they’ll stop adding to the lump sum and then they’ll start spending it.
At American Wealth Builders, we call this “the depletion method” of saving for retirement because you save up that lump sum of money and then spend it (deplete your savings) until you die.
Yes, it’s grim to think about but the best cast scenario of depletion method retirement is that you die with just enough in your bank account to cover your funeral expenses. In a sense, the depletion method’s ideal goal is “zero out” of life.
Yeah, I know this is going to a dark place but trust me, it’s worth talking about now rather than later.
Here’s why we need to talk about this…
The depletion method only works when you know the date of your death and you’re able to save up enough money to cover you from the date of retirement until the date of death.
But, do you know the date of your death?
Personally, I don’t know the date that I’ll pass away and I don’t want to.
Therefore, we don’t know how much we each need to save as a lump sum in order to retire.
Not surprisingly, at least 60% (probably more) of retirees, or soon-to-be retirees, are realizing that they may outlive their retirement savings…
Especially since medical advancements are allowing us to live long and vibrant lives well into our 90’s (or longer!)…
And because the cost of living is always rising…
And because a lump sum can be DRAMATICALLY impacted by things outside of your control, including economic recessions. (I can’t tell you the number of horror stories I’ve heard about people who were almost retired who had to go back to work)…
And because it’s VERY difficult to work for 45 years (and pay all of life’s expenses along the way) while still saving enough to cover a comfortable retirement that could last 30 or 40 years!
So, what’s the answer?
I believe the first thing that needs to happen: people need to break free from the lump-sum-savings/depletion method of saving for retirement and focus instead on a different way to save for retirement.
What if there was a way to get an ongoing amount of month month-in and month-out, without ever worrying about running out?
That’s where turnkey real estate comes in.
Investing in cash-flowing turnkey real estate ERASES the fear of outliving your savings… because a real estate investment pays ongoing payments, just like a pension that never runs out.
So, if you retire and enjoy 20, 30, 40, even 50 years of retirement… no problem. You’ll never run out of money because you’ve got more coming the very next month (plus you’re not depleting your initial capital to do it).
If you’re thinking about retirement and worried, like millions of other Americans, that you could out-live your money, get on the phone with us right away to talk about how a turnkey real estate investment can put monthly cash-flow into your bank account to erase your worries and fund a comfortable and long-lasting retirement.
Chief Operating Officer
American Wealth Builders
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