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Retirement: ‘Where you live could actually be the biggest’ decision you make, Silvur CEO says

Silvur Founder and CEO Rhian Horgan joins Yahoo Finance Live to share tips for retirement planning in 2023 and why it matters so much where you end up living.

Video Transcript

DAVE BRIGGS: You can now invest more in your 401(k) and IRA in 2023, but should you? Let's talk retirement now with Silvur founder and CEO Rhian Horgan, brought to you by Fidelity Investments. Nice to see you. So not all say you should be maxing out your 401(k) and your IRA, given the state of the economy and the markets. What say you?

RHIAN HORGAN: So it's a good question. I think as consumers are starting out the year, the key thing to think about is that most consumers have time on their sides. So we look at last year. Obviously, the markets were down almost 20%. So the average consumer is probably feeling a little bit of pain in their retirement savings. But if you think about really investing for that 20 or 30-year time horizon that many people will spend in retirement, getting invested is actually really critical at this moment in time.

SEANA SMITH: So you talk about getting invested for people that are looking to save up for retirement. What's the one or two things they need to do first or think about first?

RHIAN HORGAN: Yeah, so I think the first thing is really making sure you know where you stand today. And so the first thing you do is actually get a retirement plan in place. Get your account balances updated. Again, if you're working off numbers from last year, they're probably not correct. So get the numbers updated.

When you're updating your numbers, not only think about updating your financial savings numbers, but think about spending. Spending is all about really making sure that you understand how the inflationary environment is impacting what your monthly spend is and what it'll be in the future.

I'd also think about retirement income, getting a check in to see what your retirement income looks like. Last year, Social Security increased the cost of living adjustment by about 8.7%. And so it's likely that your projected retirement income is actually higher looking forward than it was the last time you checked.

DAVE BRIGGS: How do you factor in the recent market performance, given the struggle of the S&P last year? And there are lot of predictions of a 3,000 low coming.

RHIAN HORGAN: So I think if you actually think about investing over the long-term, most retirees are really thinking about investing over a 10, 20, 30-year time period. So if we think about long-term returns, given that we now see higher yields on bonds, as a base, actually, I think many investors, when you think about investing over a cycle, think about now as a really great time to start averaging in. And again, thinking about you are investing over the long-term. This isn't about perfectly timing the market, but thinking about putting your capital to work over the next couple of quarters.

SEANA SMITH: You're on the front lines of this. You're having conversations with people who either are in or planning for retirement. What are some of the trends that you're noticing, given all of the uncertainty out there? And I would believe people are a little bit scarred by what happened last year.

RHIAN HORGAN: Yeah, so look, I think this last-- not even just last year, the last couple of years have been a time when I think a lot of soon-to-be retirees are reevaluating their plans. They're thinking about where they live in retirement. Where you live could actually probably be the biggest retirement decision you make because of the differences in taxes in different states, the different costs of healthcare.

The second thing is that retirees are really thinking a lot actually about the cost of healthcare and retirement and planning for it. With the average retiree spending upwards of $5,000 a year on healthcare costs and retirement, it's something they really have to plan for. And so I think for many retirees, as those numbers become more and more clear to them, they're taking a much more proactive step and adding that retirement healthcare costs to their budgets.

SEANA SMITH: Rhian Horgan, great to have you here joining us as part of our retirement ready series brought to you by Fidelity Investments.