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The Weekly News Source for Wyoming's Ranchers, Farmers and AgriBusiness Community

Planning for Retirement

by Wyoming Livestock Roundup

Agricultural families retiring today face many financial challenges. Low interest rates, volatile stock markets, increasing life expectancies, rising health care costs, uncertainties about Social Security and fears of higher inflation and tax rates have made planning for retirement a difficult task. In addition, news reports on our economy, national debt and homeland security raise fears about our well-being and future financial security.

Many today are scared, confused and unsure of how to invest to generate an income that will last as long as they do and keep pace with the rising cost of living.

Increasing life expectancies

One of the greatest challenges people face today in retirement is longevity. People are living longer due to advances in medical technology.

In 1900, the average man was expected to live to age 46. In 1936, the average life expectancy increased to age 63. Today, a married couple age 65 has a 40 percent chance that one spouse will live to age 95.

Investing for a retirement that could last 20 to 40 years requires careful planning.

Rising health care costs

The cost of health care has skyrocketed in recent years.

As we age, health care becomes a much larger portion of our total annual spending. People typically under estimate how much health care will cost them during their retirement years.

According to a 2014 study by the Employee Benefit Research Institute, in 2014, a couple would need $247,000 in savings to cover health care expenses in retirement if they wanted a 90 percent chance of having enough savings in retirement to cover their lifetime health care expenses, not including long-term care.

If you are age 65 or older, do you have $247,000 ear-marked specifically for health care expenses?

Long-term care

Long-term care includes home health care, assisted living facilities and skilled nursing home care. Neglecting to factor the cost of long-term care in your retirement planning could prove to be very harmful to your future lifestyle.

According to a recent study, at least 70 percent of people over age 65 will need long-term care services at some point in their lifetime.

In 2014, the median annual cost of home health care in the U.S. was $43,472. The median annual cost of a single occupancy bedroom in an assisted living facility was $42,000. The median annual cost of a semi-private room in a nursing home care facility was $77,380. The median annual cost of a private room in a nursing home care facility was $87,600.

Most long-term care costs are not covered by Medicare. If you do not have long-term care insurance or if your long-term care insurance is inadequate, the cost of care could severely affect your retirement lifestyle.

Social Security

Starting in 2033, Social Security trustees project the system will be able to pay only 77 percent of promised benefits. For this reason, a number of reforms have been suggested. While most individuals who will be selling their farm or ranch soon will not be affected by these reforms, these reforms could negatively affect future retirees.

Some of these proposed reforms include raising the retirement age, raising payroll taxes and revising benefit formulas.

The age you file for Social Security benefits can dramatically affect the lifetime payments you will receive. Filing for Social Security benefits too soon and failing to coordinate benefits with your spouse are common ways that people fail to maximize the income Social Security may provide.


Inflation is a critical factor in retirement planning. As inflation rises, every dollar you own buys a smaller percentage of a good or service. When inflation goes up, there is a decline in the purchasing power of money.

Conventional thinking says that you must be conservative with investments as you approach retirement, as well as during your retirement years. If you have enough money and if inflation is not a significant factor, you may get by with investing all your money in very conservative investments.

However, most people need a portfolio with the growth potential of stocks and real estate to have the best chances of generating an income that keeps up with inflation. Too much exposure to more aggressive investments, however, exposes you to the risk of a market downturn, which, in turn, could put your retirement security at risk.

Having a properly diversified portfolio matched to your risk tolerance is key to helping you outpace inflation and achieve your financial goals.

Chris Nolt is the owner of Solid Rock Wealth Management, Inc. and Solid Rock Realty Advisors, LLC, sister companies dedicated to working with families around the country who are selling a farm or ranch and transitioning into retirement. For more information, visit and

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