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VIDEO: How Long is Your Railroad Retirement?

Retirement Financial Planning

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Transcript:

Welcome, everyone, to the Railroad Retirement Whiteboard. My name is John McNamara, Highball Advisors, and today, not gonna so much talk about Railroad Retirement, but we're really gonna talk more about financial planning and specifically how you guys should be thinking about planning when you put your retirement together, what you're thinking about in retirement. So the Railroad Retirement Board did an interesting study, came out December, at the end of December 2018, and it was basically, how long do Railroad retirees live, I mean, right? I mean you gotta make a plan, right? So how long do they live? And I think there's the conventional wisdom that it's a very hard job, and it is a hard job, and so Railroad retirees, they're not gonna live that long, right? Well, it's exactly the opposite, to tell you the truth. I wouldn't say opposite, but it's significantly different than conventional wisdom. So the Railroad Retirement Board, commissioned through their, I think they have a bureau of actuary and records. They did a study on it, and how did they compare to the general population. So I thought it was quite interesting. So if you take age 60 retiree from the Railroad Retirement, a male, they live 22 and half years. A female lives 25.6 years. That's just them crunching their numbers. And the general U.S. population, the male lives 21.7 years, age 60. So Railroad retirees higher and the females 24.6. So right there, Railroad retiree is a year longer. And also at the same, the gap closed a little bit at 65. And then around 70, it starts to even out as far as the length of their lives, from 70 on. So the point I'm trying to say with that is don't be thinking, "Oh, I'm a Railroad guy, "I'm not gonna live," No, you're better than the general population, in a large extent health-wise. It could be a couple things. I think with the Railroad Retirement I think you have access because of the Tier 1, Tier 2 funding, I think financially you should be better off better access to healthcare, that type of thing, versus the general population. And there's studies showing how much better Railroad Retirement is than social security. So, if you're in retirement, I think that might be one of the reasons. There could other reasons. You could send your comments in on why you think that is. So then it got me to thinking, okay, just general stats as you guys as Railroaders you wanna plan for your retirement. So a male at 65 has a 20% chance to make it to 90. 20% to me, is significant That's going to happen. That's a real probability of something happening. Female, 31%, wow, you know, that's significant. So you gotta be at least thinking 90, right, because if you take a couple, it's around 50% one of 'EM is gonna make it to 90. That's a coin toss, so you really need to plan for that, and, actually, you take that same couple and there's a 17% chance one 'EM is gonna make it to 95. That's another high probability, you know. Think about the things that you would or wouldn't do with 17% chance in life. If you get a house, house insurance, think about that. Imagine is there was a 17% chance of something happening to your house. You'd be buying insurance, but you buy insurance, and it's obviously less than 1% chance that happening. So, the point is, prepare. Prepare for this. May happen. I hope it happens, I hope it happens for everybody, but you have to be prepared for it and you wanna make sure that you don't run out of money in retirement. So if you're retiring at 60, and now you're thinking, 95, hey that's 35 years. Well 35 years, that's a long time. I still need my money to grow. And these numbers could go out even further. I don't know what the healthcare industry's gonna look like in 30 years. There could be significant advances. This number could blow out even further, especially if you're doing 60 or even 70, to tell you the truth, you really still need that money to grow, and that's why I want you to get to thinking about is growing your retirement as we go through. That's basically what I wanted to talk about to you. It's not a great subject, but I think it's important as a foundational piece of planning for your retirement. I hope you enjoyed this video. Please subscribe to my YouTube channel, it's grown quite well, and always subscribe to it, I appreciate that. In the meantime, stay safe, stay on track, and take care. So long, everybody, bye.

Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved.