You’ve lost more of your Nest Egg than you think.

Right now, may be one of the roughest times that retirees will have to deal with for a long time. The effects of inflation and market declines won't go away soon.

Knowing what to do now is critical to your long-term financial success. It is a bad time to be making mistakes about your nest egg or missing out on great opportunities that you may not even know exist.

"Save for retirement" is something we have all heard for a very long time. That is easy. Knowing what to do with your nest egg as we move through life is something we all can use a little help with.

Let me please share with you two significant and common problems retirees face today and then offer you a chance to see where your opportunities for improvement are.

Nest eggs are made up of different types of accounts, all with different levels of risk, liquidity, tax treatment and potential reward.

It's been a rough time to own accounts with market risk. Accounts that could go down in value have all gone down in value in 2022. Losses of 15, 20 and even 50% are common for stocks. Bonds have gone down too.

Americans over age 65 own trillions of dollars of stocks. Stocks of big US companies like Amazon and Netflix, mid and small size companies like The Andersons and First Solar, and companies all over the world like Nestle and Sony. Their massive stock holdings are found in their IRAs and 401(k)s, mutual funds, variable annuities, and brokerage accounts.

According to recent statistics, retirees with nest eggs of $250,000+ own, on average, over $100,000 of stocks. Often stocks represent 40-50% of their retirement savings.

How have recent stock market declines hurt retirees financially and impacted their peace-of-mind?

Let’s look at a simple example of how retirees have recently been blindsided by two serious problems. Over the course of just eight months a lot has happened to create uncertainty for any one near or in retirement.

Imagine having $100,000 in a low-cost S&P 500 index fund on January 1st. Fidelity, Vanguard, Schwab and many others offer such funds and ETFs.

From that account our retiree is withdrawing $400 monthly to deposit into their checking account. They use that money to supplement their Social Security and pension.

With withdrawals, our retiree’s account today is worth around $80,000. The account now needs to earn over 25% to get back to $100,000.

When our retiree had $100,000, their monthly withdrawals of $400 were equal to 4.8% of their account. That meant their account needed to earn about 5% to stay even.

Now with a balance of $80,000, their monthly withdrawals of $400 are equal to 6.0% of their account. You need to earn more now just to stay even.

This is the first problem- Account values are way down, and a good performance is needed to get back to where we started the year. Withdrawals also now represent a larger percent of their account value with less room to increase monthly amounts if more is needed in the future.

The second problem is that their $400 monthly deposit into their checking account isn’t worth $400 anymore. You know what I mean.

Salad dressing was $1.49 and is now $2.39. Coffee. Chicken. Meat. Beans. Everything is more expensive and can we reasonably think prices will ever go down.

Utilities are way up. Natural gas and electricity rates are near 14-year highs.

Haircuts and handyman services cost more.

Restaurant meals and movie tickets. Netflix and internet. It all costs more.

That $400 a month withdrawal should probably be increased by 20-25% to have equal purchasing power. But can their now $80,000 account value support such an increase?

Two big problems- a nest egg that has taken a hit and our cost of living going way up.

For 40-years we have helped retirees maximize their retirement income. We find ways to increase the income from your accounts. We also help identify expenses that could be lowered or eliminated.

Don’t underestimate the value of having a Retirement Income Plan. Your personalized Retirement Income Plan allows you to have the right accounts, in the right amounts, and to use them in the right order.

Without a Retirement Income Plan, you may be leaving significant opportunities untouched or making financial mistakes that could be easily corrected.

More nest egg and more income could be yours. Give Fred Quinn a call today for a complimentary consultation. He can be reached at 419-495-8700.