7 Questions You Must Answer Before Retirement

7 Questions You Must Answer Before Retirement

Almost 10,000 Americans turn 65 years of age each day. Most are poorly prepared for what lies ahead. We have isolated seven questions that everyone must answer BEFORE they retire. These questions are:

  1. When Will You Retire?
  2. Where Will You Retire?
  3. When Will You Take Social Security?
  4. What Will Your Health Insurance Coverage Be?
  5. How Much Risk Do You Need?
  6. What Will You Do?
  7. How Will You Handle “The Unknowables”?
     

When?


When you retire holds the place of priority among the list for obvious reasons. Once you stop working, you start withdrawing and depleting your accumulated pool of financial resources. One fun fact: the average retirement age in the U.S. has changed very little over the past half century. Age 63 has remained the average retirement age largely because the early date for Social Security kicks in at age 62. What has changed is life expectancy. We have written extensively on this topic recently. For many individuals, planning to live past age 90 is realistic.

Where?


It is not uncommon for retired couples to relocate after a few years in retirement in order to be closer to family. Living costs in South Carolina are quite different than they might be in other parts of the country. Perhaps you plan to downsize but stay in the area. If so, don’t expect to reap a real estate windfall in that process. Our experience tells us that this generally amounts to an exchange of value from an older, larger property into a smaller, equally as expensive home.

Social Security


As we mentioned earlier, many individuals start collecting Social Security at or around age 62. For most, this will end up being a financial mistake. Delaying your start date for Social Security increases your monthly benefit by over 8% each year that you wait from age 62 to 70! There are of course many factors that weigh on the decision, but if you can delay, in most cases you should.

Health Insurance


Healthcare expenses of all kinds can be a heavy burden in retirement. Yes, many of these expenses will be covered by Medicare or Supplemental Insurance, including continuing coverage from your employer. All said, however, a significant portion of healthcare costs will not be covered by any type of insurance. Research points to more than $200,000 in uncovered medical expenses between age 65 and death for the average retired couple.

How Much Risk?


Investing means taking a risk; Not investing also means taking a risk. Cost of living increases, (inflation), are the silent enemy in retirement. An individual turning age 65 this year has experienced an average inflation rate of 3.5% per year during their life. Almost everything that you buy costs more each and every year. If your resources don’t keep pace, your lifestyle has to decline.

What Will You Do?


Retirement can be a time for reinvention and regeneration. Many of our retired clients find great meaning by doing volunteer work, mission work or just engaging more directly with their children and grandchildren. Some even opt to continue working part time. Whatever the case, having sufficient activities to fill your time is crucial to a satisfying retirement.

The Unknowns


Retirement is full of surprises, and many of these can’t be anticipated or known in advance. There will be financial surprises, of course, but also psychological and physical surprises. These surprises, or unknowns, will likely take both positive and negative forms.

Planning for retirement is indeed multi-faceted and complicated but can reap handsome and long-lasting returns. The best time to start is five or more years prior to retirement. The second best time is...today. 

James E. Wilson
Advisor
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James founded South Carolina’s first fee-only financial planning firm in 1982 and is a pioneer in the financial planning field. He has advised hundreds of successful individ ... Click for full bio

Rosie the Robot, Amazon, and the Future of RAAI

Rosie the Robot, Amazon, and the Future of RAAI

Written by: Travis Briggs, CEO at ROBO Global US

It’s tough to find a kid out there who hasn’t dreamed about robots. Long before artificial intelligence existed in the real world, the idea of a non-human entity that could act and think like a human has been rooted in our imaginations. According to Greek legends, Cadmus turned dragon teeth into soldiers, Hephaestus fabricated tables that could “walk” on their own three legs, and Talos, perhaps the original “Tin Man,” defended Crete. Of course, in our own times, modern storytellers have added hundreds of new examples to the mix. Many of us grew up watching Rosie the Robot on The Jetsons. As we got older, the stories got more sophisticated. “Hal” in 2001: A Space Odyssey was soon followed by R2-D2 and C-3PO in the original Star Wars trilogy. RoboCop, Interstellar, and Ex Machina are just a few of the recent additions to the list.

Maybe it’s because these stories are such a part of our culture that few people realize just how far robotics has advanced today—and that artificial intelligence is anything but a futuristic fantasy. Ask anyone outside the industry how modern-day robots and artificial intelligence (AI) are used in the real world, and the answers are usually pretty generic. Surgical robots. Self-driving cars. Amazon’s Alexa. What remains a mystery to most is the immense and fast-growing role the combination of robotics automation and artificial intelligence, or RAAI (pronounced “ray”), plays in nearly every aspect of our everyday lives.

Today, shopping online is something most of us take for granted, and yet eCommerce is still in its relative infancy. Despite double-digit growth in the past four years, only 8% of total retail spending is currently done online. That number is growing every day. Business headlines in July announced that Amazon was on a hiring spree to add another 50K fulfillment employees to its already massive workforce. While that certainly reflects the shift from brick-and-mortar to web-based retail, it doesn’t even begin to tell the story of what this growth means for the technology and application firms that deliver the RAAI tools required to support the momentum of eCommerce. In 2017, only 5% of the warehouses that fuel eCommerce are even partially automated. This means that to keep up with demand, the application of RAAI will have to accelerate—and fast. In fact, RAAI is a key driver of success for top e-retailers like Amazon, Apple, and Wal-Mart as they strive to meet the explosion in online sales.

From an investor’s perspective, this fast-growing demand for robotics, automation and artificial intelligence is a promising opportunity—especially in logistics automation that includes the tools and technologies that drive efficiencies across complex retail supply chains. Considering the fact that four of the top ten supply chain automation players were acquired in the past three years, it’s clear that the industry is transforming rapidly. Amazon’s introduction of Prime delivery (which itself requires incredibly sophisticated logistics operations) was only made possible by its 2012 acquisition of Kiva Systems, the pioneer of autonomous mobile robots for warehouses and supply chains. Amazon recently upped the ante yet again with its recent acquisition of Whole Foods Market, which not only adds 450 warehouses to its immense logistics network, but is also expected to be a game-changer for the online grocery retail industry.

Clearly Amazon isn’t the only major driver of innovation in logistics automation. It’s just the largest, at least for the moment. It’s no wonder that many RAAI companies have outperformed the S&P500 in the past three years. And while some investors have worried that the RAAI movement is at risk of creating its own tech bubble, the growth of eCommerce is showing no signs of reaching a peak. In fact, if the online retail industry comes even close to achieving the growth predicted—of doubling to an amazing $4 trillion by 2020—it’s likely that logistics automation is still in the early stages of adoption. For best-of-breed players in every area of logistics automation, from equipment, software, and services to supply chain automation technology providers, the potential for growth is tremendous.

How can investors take advantage of the growth in robotics, automation, and artificial intelligence?


One simple way to track the performance of these markets is through the ROBO Global Robotics & Automation Index. The logistics subsector currently accounts for around 9% of the index and is the best performing subsector since its inception. The index includes leading players in every area of RAAI, including material handling systems, automated storage and retrieval systems, enterprise asset intelligence, and supply chain management software across a wide range of geographies and market capitalizations. Our index is research based and we apply quality filters to identify the best high growth companies that enable this infrastructure and technology that is driving the revolution in the retail and distribution world.

When I was a kid, I may have dreamed of having a Rosie the Robot of my own to help do my chores, but I certainly had no idea how her 21st century successors would revolutionize how we shop, where we shop, and even how we receive what we buy - often via delivery to our doorstep on the very same day. Of course, the use of RAAI is by no means limited to eCommerce. It’s driving transformative change in nearly every industry. But when it comes to enabling the logistics automation required to support a level of growth rarely seen in any industry, RAAI has a lot of legs to stand on—even if those “legs” are anything but human.

To learn more, download A Look Into Logistics Automation, our July 2017 whitepaper on the evolution and opportunity of logistics automation.


The ROBO Global® Robotics and Automation Index and the ROBO Global® Robotics and Automation UCITS Index (the “Indices”) are the property of ROBO who have contracted with Solactive AG to calculate and maintain the Indices. Past performance of an index is not a guarantee of future results. It is not intended that anything stated above should be construed as an offer or invitation to buy or sell any investment in any Investment Fund or other investment vehicle referred to in this website, or for potential investors to engage in any investment activity.
ROBO Global
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ROBO Global LLC is the creator of the ROBO Global® Robotics and Automation Index series, which provides comprehensive, transparent and diversified benchmarks representing the ... Click for full bio