The plan used to be that you would retire at 65, rely on Social Security and your retirement investments, and live the rest of your life in peace. However, this isn’t as cut and dry as it used to be. Because of increased longevity and changes in retirement expectations, your investment strategy matters more than ever. You need to be aware of the ways retirement is changing and how you can adjust your plan to meet your financial goals.

How Retirement and Investment Strategies are Changing

1. Life Expectancy is Higher

In 1950, the average life expectancy for a man in the U.S. was 65.6 years, while a woman's life expectancy was 71.1 years. In 2017, those numbers rose to 76.1 and 81.1, respectively. Since people are living longer, the length of retirement is also increasing. Because of this, you will want to have more money saved and a different investment strategy in place. Also, the probability of getting dementia and other debilitating diseases increases significantly with age. Therefore, you may need more money for memory care and additional healthcare costs as you exit the workforce.

2. People are Retiring Early

It's simple math. If you retire early and live longer, you'll have more years where you are not bringing in income. Therefore, if you want to retire early, you'll need to invest wisely to build a big enough nest egg to maintain the same lifestyle you had while you were working.

3. Many Want to Travel in Retirement

You might think that your expenses will decrease when you retire, and life will become simpler. While that might hold for you, many people want to travel, explore costly hobbies, or move to exotic locales when they retire. These types of adventures cause expenses to rise in retirement. If you know experiences like this are on the horizon, you need to work on investment strategies to put away money now so that you can have fun in the future.

4. Medicare is More Complex

In retirement, you typically will be using Medicare for your health care coverage. These policies used to be pretty straight forward and uniform, but with the introduction of Medicare Advantage plans, consumers can now pick plans that are more suited to their needs. Premiums vary among these plans, and so do benefits and out-of-pocket costs. It's essential to do your research and pick the best plan for your situation. Be aware of existing medical conditions as well as those you may be genetically predisposed to, like dementia, heart disease, or certain forms of cancer.

5. No One Knows the Future of Social Security

We all pay into it, but people are now unsure if they'll receive Social Security benefits in the future. Though it may not be true that Social Security is going bankrupt, there has been a definite crunch as the elderly population increases. While only 16% of the population is over 65 today, that number will skyrocket over the next few decades. When planning for retirement, it may be in your best interest not to rely entirely on Social Security and instead have a sound investment strategy or retirement plan in place.

If you are looking for a firm to help you plan and implement a solid investment strategy for retirement, turn to the experts at Headwaters Investment Council in Kirtland, OH. With over 40 years of experience, their knowledgeable management team helps Lake County residents, businesses, and institutions meet their financial goals. Call (440) 399-3359 to set an appointment or visit their website to learn more about their money management services.