Today’s topic is how to increase your retirement success probability.

What we’ll do today is talk about what retirement success probability is and we’ll talk about some of the ways to help increase that by mitigating the four biggest risks in retirement.

Before I get into that, I want to say congratulations because if you’re reading this, that means you’re nearing retirement, so you’ve worked your tail off and you’re getting close there.

Number two, you’re being responsible and starting to think about ways to help increase your retirement success probability.

And you’ve probably been working with a financial professional to help you make some of those very important decisions.

Okay, so let’s get into it. What is retirement success probability?

At the core, it’s having enough money through retirement. Another way to say this, ?Not Outliving your Money in Retirement? whether your spouses or an individual. Can you think of anything worse than that financially when you retire?

Depending on life expectancy, desired income, and retirement age, what your advisor is able to do is run what’s called a Monte Carlo simulation.

What that’s doing is looking at thousands and thousands of data points based on historical performance in different markets. And it’s able to give us a projection of what could potentially happen.

Obviously, there’s a high-side, there’s a low-side, and there’s an average. But really what we want to do is increase that retirement success probability as much as possible.

A percentage between the low 90s to high 90s would be a very safe place to be as your retirement success probability.

So, let’s talk about the four ways that we can mitigate risks to help increase your retirement success probability.


The first one we’re going to talk about is longevity. Longevity is what we call the risk multiplier.

What that means is the longer you’re alive, the greater the chance you can be subject to these three other risks.

There’s a greater chance that the stock market could go down the longer you live.

There are more chances that tax rates can go up the longer you live, and inflation is pretty much going to increase every year.

Over time your purchasing power is going to go down. Longevity is the risk multiplier that we want to account for first.

With healthcare quality and life expectancy being longer and longer, that’s something that is very real.

If you’re 65 now and married, there’s actually a 50% chance that you or your spouse will live to age 91.

In retirement you want to make sure you plan for a minimum of 25 to 30 years of guaranteed income.

The way that we can help mitigate risk with longevity is to find something with guarantees, so a guarantee that even if your account balances go to zero, you’ll never run out of your stream of income.

Again, we want something that has that stream of income, what we sometimes call mailbox money, that will never run out, as long as you live. This way you can account for longevity.

Stock Market

Next, we’re going to talk about stock market.

So, here with the stock market, I think everybody knows we want to prevent losses. That’s pretty easy, right?

But it’s not just preventing losses. Sometimes, what we want to do is take some chips off the table.

When your accounts are doing well, we call it harvesting the gains. So, take some of those gains, that interest earned, and put those into a safe bucket.

Take them out of the market, put them into a place that’s less risky and do that as you near retirement. But again, everybody’s tolerance is a little bit different.

So, work with your financial advisor and find a comfortable risk tolerance or blend of a portfolio that’s going to be comfortable for you.

One that doesn’t limit your upside too much, but also doesn’t have too much risk, nice, happy medium.

So, that’s longevity and stock market volatility.

Income Taxes

Now, let’s talk about everyone’s least favorite, taxes.

Right now, we are in a historically low tax bracket. What that means is that there’s a very good chance that taxes will be going up.

And one thing that a lot of us do is we put a lot of money into tax-deferred accounts.

Think about when you get to retirement, maybe you have $1 million in savings, it can be in qualified accounts or tax-deferred accounts. You need to take into consideration the taxable portion of, for example, a 401-K. What is left over is the amount you have left to live on during your retirement years.

Maybe reduce your taxable qualifies accounts by 30% and that’s the money that you need to plan for because unfortunately, we do have to pay Uncle Sam.

Also, in retirement there’s a very good chance that you’re going to be in the highest tax bracket that you’ve ever been in.

Hopefully, when you retire you’re going to have the highest amount of income. And unfortunately, one of your biggest deductions will be gone when your kids are out of the house.

Your home could be paid off, so another large deduction gone.

So, we want to try and get as much tax-free income or tax-free assets as we can when we get to retirement.

Again, we’re going to look at tax-free options. So, the best way to do that is to start early and start a tax-free bucket.

Work with your financial advisor because there’s a lot of different options that you can use to help mitigate some of that tax risk as you’re getting to retirement and again, help increase your retirement success probability.


Finally, inflation, and I think everybody knows that inflation is sometimes called the silent killer.

That’s something that’s going to be there pretty much no matter what. As the world grows and debt grows the purchasing power of our dollar is going to decrease.

The consumer price index actually stated that something that cost $100 30 years ago now costs $207.

So, over 30 years, that’s 107% increase.

What we need to do there, to help mitigate that risk and increase our retirement success probability, is find investments that have an increasing income option. This can help mitigate the affects of inflation over time.

A lot of these vehicles that your financial advisor can recommend that take some of these risks off the table, increase that retirement success probability, creating streams of income. Or even laddering your income.

We’d like it to be guaranteed. We’d like it to be tax-free, and if we can, we’d like to have an increasing option as well.

That’s about all I have for you today. So, these are the four ways that we can help mitigate risk and increase your retirement success probability.

At Excalibur Life Insurance and Annuity Solutions we offer solutions to increase your probability of a successful retirement. Please reach out to me at 888-839-3536 or

Thank you for your time.

Mel Samick