Financial Wellness Center


Feb 15, 2019

Retirement in Motion Q1 2019


Healthcare takes a bigger share of Social Security benefits as you age
Many people expect that they will be able to live on less income in retirement. Some expenses clearly will fall for some (such as mortgage payments and commuting costs), but others may rise, and potentially increase over time (such as healthcare). Based on current projections from HealthView Services, a 45-year-old couple will spend an average of 63% of their Social Security income on healthcare. But at age 87, that same couple will need 72% of their Social Security income to cover health-related expenses.¹

What is a deferred annuity?
A deferred annuity is an insurance contract that exchanges a lump sum payment, or series of payments, for a guaranteed delayed future stream of income, installments or lump sum. Money inside the contract accumulates tax-deferred until it’s withdrawn. Returns can be variable (that is, based on market performance) or fixed. Savers sometimes use annuities to supplement income from their pension plan or Social Security. All annuity guarantees are subject to the claims-paying ability of the insurer issuing the contract, so it’s important to look closely at the strength and stability of the insurance company you’re considering.

Quarterly Reminder
With the level of market volatility that we experienced in 2018, it is possible that your preferred asset allocation may be off target. Say, for example, that your target international stock allocation is 30% of your portfolio. In 2018, your international holdings dropped to 20%, due to weakness in global markets. To rebalance your portfolio to its original target, you would
sell enough of what increased in your portfolio to restore your international holdings to 30%.²

Tools & Techniques:
Investment concepts you should understand

Investment literacy is an important way to stay on top of your retirement plan. Bone up on 12 key investment principles that you need to stay informed by viewing a quick slideshow at from AARP.

Corner on the Market:
Basic financial terms to know
Hindsight bias
In behavioral finance, hindsight bias relates to making decisions about future outcomes based on previous events. It reminds us of the truism that past performance does not predict future results, a cornerstone of every disclosure about what you should expect from investing in a particular stock, bond
or fund.

 ¹ Source:
 ² Tax implications should be considered when implementing a rebalancing strategy. Auto-rebalancing options may also be available.

Pensionmark Financial Group does not provide tax or legal advice. Please consult with a tax professional prior to deciding on any distribution option.


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