Increase savings. Bruce could have found additional savings on a monthly basis to save for retirement. Unfortunately for Bruce, he was already at the end of his budget by saving $400 per month.
Retire later. Bruce could have chosen to retire later than age 62. Bruce is not open to this option. Can you blame him?
Lowered expectations. Bruce could give up some of his lifestyle expectations for retirement. Instead of going to Hawaii every year, he could go every 10 years instead. Bruce did not choose this option.
Increase his investment returns. Bruce has been averaging a return of 3.5% on his money. He could choose to change his investment strategy and try to increase his return. In fact, this is exactly what Bruce chose to do. He diversified his investments. And by using asset allocation to help reduce the risk on his investments, Bruce's goal is to average a return of 5.5% per year. Keep in mind, neither asset allocation nor diversification ensure a profit or protect against market loss.
Bruce decides that he will be able to achieve his retirement goal by changing his risk tolerance and his investment strategies. For Bruce, the investment decision was the right choice. But any of those options may have been appropriate for you. The point is that by taking the time to create a plan, Bruce puts himself in control of his retirement. He now knows that he may be closer to meeting his retirement goals.
The Western National series of annuities is issued and underwritten in New York by The United States Life Insurance Company in the City of New York and in all other states by Western National Life Insurance Company.