The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. Today, we’re focusing on longevity.

Longevity goals are all about making sure that your basic needs are covered in retirement, so you don’t run out of money or become a financial burden to others. It’s possible and even likely, that you’ll spend 30+ years in retirement, so you need to make your money last.

Thinking about your retirement in terms of longevity addresses that concern. Do you have enough in assets to cover your basic needs for 30+ years in retirement. Will you be able to pay for housing, health care, and basic living expenses with your retirement nest egg?

Will your portfolio and other sources of income adequately address your longevity needs and your basic living needs in retirement?

It’s also very important to consider how your portfolio and how it’s invested will be able to go the distance for you in retirement. It’s critical that you can keep up with inflation, which will take a significant toll over a 30+ year retirement. And that usually means having a portfolio that can continue to grow for you while providing for your basic living needs.

If you’re most concerned with providing for your basic needs in retirement and not running out of money, then the longevity goal will likely take priority in your plan for retirement and your spending decisions.

That’s it for today, Thanks for listening!

Tomorrow, come on back, because I’m going to cover the 2nd L - Lifestyle.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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