Ric Edelman: Hi! I am Ric Edelman. In this video, we are talking about what retirement means for your investments. The day you retire doesn't mean much for your retirement account. Oh! Sure, you will pack up your desk and say good bye to coworkers and you will commute home for the last time, your life will change, but your investment account doesn't have to.
You might be shocked to hear this. Many people assume that they should make big changes to their retirement accounts the minute they retire. The truth is, retirement is a lifestyle issue, not an economic one unless you fail to plan properly. Retirement does not mean your life is over, although it used to mean that. For most of our nation's history, people never retired, they died. But luckily things are different today. People who are 65 can expect to live another 20 or 30 years and that means if you're 60, you need to be just as concerned about inflation as someone who is 30.
Yet most retirees and pre-retirees believe that their only worry is safety. Wrong! Since 1926 according to Ibbotson Associates, inflation is average 3.
2% per year and that means the cost of living doubles every 23 years. Instead of worrying about safety, you should be worrying about affording food after inflation erodes your income in the years to come. You don't want to run out of money before you run out of life. Too many retirees ignore inflation. Don't make that mistake.