A single bottle of 1992 Screaming Eagle California wine set a world record $17,625 (Canadian Dollars) at auction last week.[i] So it’s not just the housing market that is en fuego. Many assets are benefitting from cash looking to be put to work.

Wouldn’t it be nice to age like a quality wine? For many of us, aging is not a fun physical experience, but with proper care and planning, our best years can lie ahead of us financially.

 

From Young to Vintage

Last week, we looked at the potential for a wave of very young investors hitting the market following news of Fidelity Investments offering brokerage accounts to kids. Now let’s flip the coin – what is it like to be an old investor. Maybe “old” is a harsh word. How about “seasoned” or “experienced”? Maybe “vintage” to keep the wine theme running.

“Old” investors might take on a new meaning according to a new study. A Singapore-based company called Gero published research last week in Nature Communications detailing that people could live up to 150 years.[ii] The current life expectancy for Michigan residents is between 75 and 80.[iii]

Now, we don’t suggest that clients should re-tool their financial plan to account for the possibility of living quite that long, but studies like this should make you ponder your career, goals, and investing for the future. Your children or grandchildren may easily live to 100. Retiring at 60 or 65 suddenly seems early, doesn’t it?

 

 

Longevity Risk

As your advisor, it’s our job to manage your financial risks while helping you achieve your goals. Some tools we can use to mitigate the risk of outliving your money are annuities and Social Security. We also want to ensure wealth is passed on to future generations, so wealth transfer strategies that reduce your tax burden are critical.

To learn more about techniques we can use to maximize your wealth, please sit down with us.

 

New Legislation

It’s better to start thinking about it now considering change is in the air. In December 2019, the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) made wholesale changes to the retirement landscape. Many retirees are at least somewhat familiar with the new law since it raised the required minimum distribution age to 72.

Another law change is on the horizon, known appropriately as the SECURE Act 2.0.[iv] While the details are not fully known, it could raise the RMD age further to 75. Analysts say there could be expanded Roth contribution eligibility and additional catch-up retirement contributions for those aged 50 and up. There are expanded benefits for small business owners who run retirement plans as well.

 

Enjoy Summer!

There is a litany of possible changes that may be coming down the pike. We will be sure to stay on top of these matters so that your retirement plan is on the best possible track. While you and your family are enjoying summer travels, we’ll be sifting through the details of any new laws.

 

The Point

The retirement landscape is constantly in flux because “retirement” as we know it is a new phenomenon. A century ago, “retirement” meant death. 30 years ago it meant leaving your office to relax on a beach. Today, it should mean transitioning from full-time work to something more meaningful and fulfilling. New laws are adjusting to the new retirement, and the reality is that people live longer. Challenges still lie ahead, and we are here to help you navigate them so you can have daily peace of mind and enjoy a lovely evening glass of wine.

 

We’ll talk soon!

DPD


[i]https://www.prweb.com/releases/canadian_wine_auction_sets_world_record_17_625_for_single_bottle_of_1992_screaming_eagle/prweb17962267.htm

[ii] https://www.nature.com/articles/s41467-021-23014-1

[iii] https://www.mdch.state.mi.us/osr/deaths/lifeUSMI.asp

[iv] https://www.benefitspro.com/2021/05/26/top-secure-act-2-0-benefits-for-plan-sponsors-and-participants/?slreturn=20210428055142