making your savings lastLike most investors, you may be concerned about outliving your money. To sustain your savings during retirement, consider strategies that may help address the following four money-diminishing factors:

1. Longer life expectancies
In May 2016, scientists attended a Harvard conference to discuss a groundbreaking new idea — fabricating a human genome from scratch. Using a gene-editing technology called CRISPR1, scientists believe they may be able to eliminate inherited diseases and even slow the aging process. If you are under 30, you may be part of the first generation in history that could be promised immortality.

While this technology may seem like Hollywood science fiction, it points out a very real fact: We are likely to live longer, and may need our money to last longer than we ever thought. This is particularly true for women, who tend to earn less than men and are more likely to struggle financially after retirement.(2)

Investing for long-term growth remains imperative, which is why stock funds — whose returns historically have outpaced those of all major asset classes — deserve a place in most portfolios.

2. Inflation
Inflation is the rate at which the buying power of a dollar erodes each year. To maintain a reasonable standard of living over time, your investments may need to match or outpace inflation. That’s another reason to buy stocks. They historically have produced the highest returns (but also the most risk) of all major asset classes.3

Inflation’s Impact
The cost of a cup of coffee:

  • 1986 $0.35
  • 2016 $2.70
  • 2046 $6.55
    Sources: 1986 prices are based on Kmotion Research. 2016 prices are based on general averages. Projections for 2046 prices assume a 3% annual inflation rate.

3. Market returns
Over time, investing generates stable rates of return: Common stocks have returned about 11% a year, on average with dividends reinvested, since 1926; bonds have earned about 5.5%.4 But both stocks and bonds have had many years producing lower, even negative, returns. Within shorter time frames, however, returns can be choppy, and you may need to build some uncertainty into your return expectations.

The Rule of 72
To determine how many years it will take to double your money, choose a rate of return and divide it into 72.5

Rate of Return Rule of 72 (Years)
6% 12 Years
8% 9 Years
10% 7.2 Years
12% 6 Years

4. Health care costs
Likely your biggest expense as you age, health care is estimated to cost a healthy 65-year-old couple $266,600 in Medicare premiums alone, according to one study.6 This doesn’t include out-of-pocket expenses or long-term care, dental or vision insurance. Earmarking a large chunk of your nest egg for health care expenses may make sense.

A savings plan that takes these four factors into account can give you greater confidence that your savings can last well into your retirement years.


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1  Clustered regularly interspaced short palindromic repeats. Source: “Will We Be the Last Generation to Die?” Boston Globe, July 11, 2016.

2  “Shortchanged in Retirement: Continuing Challenges to Women’s Financial Future,” National Institute on Retirement Security, March 2016.

3  Past performance is no guarantee of future results. All investing involves risk, including loss of principal.

4  Source:

5  This hypothetical illustration is intended to illustrate the concept of investment compounding and is not predictive of any investment return.

6  Health View Services, 2015 Retirement Health Care Costs Data Report, December 2015.


Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045;

© 2016 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

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