The Risks and Process of Retirement Survey Report, a new study by the Society of Actuaries, indicates that the top retirement planning concern right now is the rate of inflation. Maintaining the value of assets, having enough money to pay for long-term care, affordable health care and simply having enough savings to maintain a decent standard of living after the death of a spouse.

Nearly one-third of women over the age of 65 and nearly one-fifth of men in the same age bracket can expect to live past the age of 90. Whatever the reward that longevity brings is quickly counter-balanced by the risk of exhausting retirement savings. For women, the threat posed by inflation is alarming. Without proper investing, planning and saving, a woman is likely to suffer a decline in her standard of living after the death of her husband.

One approach to countering this risk is to buy income producing investments, and investments whose values appreciate faster than the rate of inflation. In this economic situation, investments that fit these descriptions are hard to find. Traditional real estate investments, which could be counted on for moderate but steady growth, are stagnant or in some cases, declining in value.

Recently however, investors have shown significant interest in real estate in Latin America. One of Latin America’s hottest real estate markets is Puerto Vallarta. Puerto Vallarta is located on Mexico’s Pacific coast and offers a climate similar to that of Hawaii. The cost of living in Puerto Vallarta is comparatively low. Most major expenses, including health care and prescription drugs, can be reduced by 50% to 75%.

By reducing the major expenses in retirement – housing, health care, energy, food, and medicine, retirees could not only live more comfortably, but also could reasonably expect their retirement savings to outlive them even if they enjoy an extended lifespan.

Adopting strategies that combat inflation are especially important for retired women, who live an average of three years longer than men. This approach may also support individuals whose retirement savings have been compromised by the serious illness of a spouse or the need to pay for long-term care.

You can read the Society of Actuaries report on Understanding And Managing The Risks Of Retirement here. Warning: PDF link

Photo Credit: Adrian van Leen