Retro can be a cool aesthetic in many areas of life — like fashion, home décor, art and cuisine. But when it comes to your retirement planning, you don’t want to be stuck in the past. The same strategies that served your parents and grandparents well simply might not apply in today’s world — let alone tomorrow’s.
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If your retirement plans feel like they could’ve been forged in a time when Jell-O molds and bell bottoms were en vogue, it’s time to modernize. Fortunately, you don’t need a time machine — GOBankingRates spoke with several financial experts who offered tips for bringing your retirement strategy up to speed.
Jeff Herman, founder and investment advisor of The Jeffrey Group, works with clients every day to solidify their retirement plans. One of their primary concerns, he said, is having consistent income after they stop receiving a paycheck.
That’s why it’s critical for retirees to have income-generating investments beyond traditional stocks and bonds. Herman specifically suggests looking at alternative assets, which can help offset significant expenses such as healthcare costs.
“Considering the role of alternative investments, which can provide stable cash flow beyond traditional stocks and bonds, is especially vital when unpredictable costs bite,” he said. “Savers need to consider that generating a consistent income stream in retirement is more important than portfolio growth.”
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Melanie Musson, insurance and finance expert at Quote.com, agrees with Herman’s emphasis on broadening your income sources.
“The more sources of income you have, the better,” she said.
She advises thinking beyond Social Security or a 401(k) — which, along with pensions, older generations might have considered the be-all and end-all of retirement income. Instead, think of those as foundational and build on them with other strategies.
Annuities can be a useful way to secure guaranteed income in retirement. There are three main types — fixed, variable and indexed — each categorized by growth potential and risk. A financial advisor can help determine the right fit for your needs.
A side hustle can also stretch your retirement savings and boost monthly income, easing financial stress. Musson recommends getting creative with any real estate you own.
“If you can turn the real estate that you own into an income source, this could be a good time to do so,” she said. “If you own a vacation home, you may be able to turn it into a vacation rental, for example.”
Nothing matches the value of sitting down with a trained and trusted financial advisor who understands your unique circumstances. But Musson also believes there’s value in exploring technologies that can help you better understand and manage your finances in retirement.
After all, the retirees of yesteryear might have relished the ease of financial planning apps, robo-advisors and other online tools — if they’d had access to them. Don’t worry if you’re not tech-savvy; it’s less intimidating than you might think.
“If you don’t know how to get started, ask your child or grandchild to help you,” she said. “You can learn a lot from online retirement resources. You could find better ways to invest, smart ways to lower your taxes and more.”
Another key aspect of retirement planning that should evolve with the times is your withdrawal strategy. Musson suggests adjusting your approach based on your expected longevity, market changes and inflation.
“When reevaluating your withdrawal strategy, be sure to consider the tax implications,” she said. “If you could withdraw less and thereby lower your taxes, the money you take out could do more for you.”
It’s no secret people are living longer. But according to Evan H. Farr, CELA, CAP, a certified elder law attorney at Farr Law Firm, P.C., many retirees and advisors still don’t plan for long-term care needs.
“Most financial planners simply ignore this aspect of retirement planning because they want to see the world through rose-colored glasses of a client who lives a long, healthy retirement and drops dead at the end of it,” he said. “When the reality is that 70% of people over age 65 will need some type of long-term care.”
Failing to plan for long-term care can have dire financial consequences. Farr warns that this oversight can often lead retirees to bankruptcy — unless they work with an elder law attorney to protect assets and navigate the Medicaid process to pay for in-home care or nursing home expenses.
If your retirement plan is the financial equivalent of “the golden oldies,” it’s time to get with the times. Modernizing your strategy means being willing to diversify your income, explore alternative assets, reevaluate your withdrawal approach, embrace technology and prepare for long-term care needs.
It’s time to step out of the past — your future self will thank you.
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This article originally appeared on GOBankingRates.com: Is Your Retirement Plan Stuck in the Past? 5 Tips To Bring it Up to Speed