Folk make mistakes and from time to time we might learn from them assuming it isn't too late. If you find a pretty serious planning error after you've picked up your last paycheck, your retirement years are probably going to suffer. Fortunately , forewarned is forearmed, meaning finding out about common retirement mistakes will aid in avoiding them in days to come.
It is a mistake to put off retirement planning:
In the opinion of the Employee Benefits Research Institute, 60% of today's employed workers have not calculated how much they'll have to save for their retirement needs which is the first step in retirement planning. It's a rather complicated process, and the help of a financial planner can be useful when creating a step-by-step roadmap which will take you to your goal. Take time to review asset assignment, monitor investment outcomes, and make changes as needed. Though it might not be convenient, failure to plan will lead on to missed opportunities, lost tax benefits, and less than golden retirement years.
It is a mistake to believe your savings are safe:
In the past, financial consultants often told their senior clients to put 60% of their savings in bonds and 40% in stocks, with a switch to 80% bonds upon retirement. Their logic was to preserve pension savings by reducing investment risk. With longer life expectancies, many view this information as invalid. Inflation, growing quicker than the modest returns of so-called safe investments, will at last eat away at your savings and decrease your purchasing power.
Today counsellors advocate keeping the capability for growth in your portfolio up to and through retirement. A mixture of products that may get you a genuine rate of return after inflation and taxes should raise your purchasing power over a period of time or at the very least keep it steady while still minimising risk. Balance should be sought between investment security and making sure you have plenty of savings through your retirement.
It's a mistake to be overly generous:
If you're among the fortunate few that assume that they have masses of retirement savings, you may be tempted to share your wealth with your family before you retire. While your kids will certainly think highly of a paid trip through university or your help purchasing their first house, giving away assets now can put you in an awkward situation later . Nobody knows with certainty what the future holds. You'll live far longer than anticipated. You'll need costly long term hospital therapy. If you've been too generous with your savings, you may find yourself without. Always take the long view whenever utilizing your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your position needs:
Will you actually spend a lower amount than you do now during your retirement years? In the past, a rough guide amongst planners was to expect post-retirement spending to be about 80 % of your current ones. But this is not always the case. While you may not be commuting to the office every day, or spending cash on work lunches, travel and leisure activities can cost even more. Plus, certain expenses like life insurance, healthcare premiums, and co-payments are likely to increase. Also, Medicare doesn't cover things like dental, vision, hearing or skilled nursing expenses.
As you consider what you need for retirement, your future is at stake from your happiness to your financial security. Avoiding mistakes will help you create a brighter future. Spend some time to discuss your current position with a fee based certified financial planner ensuring they earn no commissions on their information or selling you financial products. Also be sure to put some of your savings to work using information and education like what is offered bySummerland Associates to help attain your goals. Making these small changes promptly will offer gigantic benefits in your retirement years.
It is a mistake to put off retirement planning:
In the opinion of the Employee Benefits Research Institute, 60% of today's employed workers have not calculated how much they'll have to save for their retirement needs which is the first step in retirement planning. It's a rather complicated process, and the help of a financial planner can be useful when creating a step-by-step roadmap which will take you to your goal. Take time to review asset assignment, monitor investment outcomes, and make changes as needed. Though it might not be convenient, failure to plan will lead on to missed opportunities, lost tax benefits, and less than golden retirement years.
It is a mistake to believe your savings are safe:
In the past, financial consultants often told their senior clients to put 60% of their savings in bonds and 40% in stocks, with a switch to 80% bonds upon retirement. Their logic was to preserve pension savings by reducing investment risk. With longer life expectancies, many view this information as invalid. Inflation, growing quicker than the modest returns of so-called safe investments, will at last eat away at your savings and decrease your purchasing power.
Today counsellors advocate keeping the capability for growth in your portfolio up to and through retirement. A mixture of products that may get you a genuine rate of return after inflation and taxes should raise your purchasing power over a period of time or at the very least keep it steady while still minimising risk. Balance should be sought between investment security and making sure you have plenty of savings through your retirement.
It's a mistake to be overly generous:
If you're among the fortunate few that assume that they have masses of retirement savings, you may be tempted to share your wealth with your family before you retire. While your kids will certainly think highly of a paid trip through university or your help purchasing their first house, giving away assets now can put you in an awkward situation later . Nobody knows with certainty what the future holds. You'll live far longer than anticipated. You'll need costly long term hospital therapy. If you've been too generous with your savings, you may find yourself without. Always take the long view whenever utilizing your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your position needs:
Will you actually spend a lower amount than you do now during your retirement years? In the past, a rough guide amongst planners was to expect post-retirement spending to be about 80 % of your current ones. But this is not always the case. While you may not be commuting to the office every day, or spending cash on work lunches, travel and leisure activities can cost even more. Plus, certain expenses like life insurance, healthcare premiums, and co-payments are likely to increase. Also, Medicare doesn't cover things like dental, vision, hearing or skilled nursing expenses.
As you consider what you need for retirement, your future is at stake from your happiness to your financial security. Avoiding mistakes will help you create a brighter future. Spend some time to discuss your current position with a fee based certified financial planner ensuring they earn no commissions on their information or selling you financial products. Also be sure to put some of your savings to work using information and education like what is offered bySummerland Associates to help attain your goals. Making these small changes promptly will offer gigantic benefits in your retirement years.
About the Author:
John A. Larsen, the Managing Director of Summerland Associates, LLC, has worked in financial services for 20+ years starting in banking. John has held Series 7, 63, and insurance licenses working with high net worth clients to craft better portfolios. John has spent the last 10+ years refining advanced investment concepts into a series of applied techniques that drive the Summerland Alerts. More articles can be found on Summerland Associates web site or through Wealth Building Ideas, published for iPads.