People make mistakes and sometimes we might learn from them presuming it isn't too late. Should you find a pretty serious planning error after you have picked up your last check, your retirement years are probably going to suffer. Luckily , forewarned is forearmed, which means becoming educated about common retirement mistakes will aid in avoiding them in days to come.
It's a mistake to put off retirement planning:
According to the Employee Benefits Research Institute, 60% of today's workers have not worked out how much they'll need to save for their retirement needs which is the first step in retirement planning. It's a rather difficult process, and the help of a financial planner can be invaluable when creating a step-by-step program which will take you to your goal. Take time to review asset assignment, monitor investment performance, and make changes as needed. Though it may not be convenient, failure to plan will lead to missed opportunities, lost tax benefits, and less than golden retirement years.
It's a mistake to believe your savings are safe:
In the past, finance advisers frequently told their senior clients to put 60% of their savings in bonds and 40% in stocks, with a switch to 80% bonds upon retiring. Their logic was to shelter pension savings by reducing investment risk. With longer life expectancies, many view this guidance as invalid. Inflation, growing faster than the modest returns of so-called safe investments, will at last eat away at your savings and reduce your buying power.
Today financial consultants advocate keeping the capability for growth in your portfolio up to and through retirement. A mix of products which will make you a real rate of return after inflation and taxes should boost your purchasing power over time or at the very least keep it steady while still minimising risk. Balance should be sought between investment security and ensuring you have lots of savings throughout 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 open to share your wealth with your family before you retire. While your children will definitely value a paid trip through university or your help buying their first house, giving away assets now can put you in a tight spot later on. No one knows with certainty what the future holds. You will live for longer than anticipated. You can need high-priced long-term medical care. If you've been too liberal with your savings, you may find yourself without. Always take the long term view whenever using your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your position needs:
Will you actually spend considerably less than you do now during your retirement years? During the past, a rough guide amongst planners was to expect post-retirement expenditures to be about 80 percent of your present ones. But this isn't always the situation. 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 costs like life insurance, health-care premiums, and co-payments are probably going to become more expensive. Also, Medicare does not cover things like dental, vision, hearing or skilled nursing costs.
As you contemplate 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 situation with a fee based certified financial planner ensuring they earn no commission fees on their guidance or selling you financial vehicles. Also be certain to put some of your savings to work using info and education like what's offered bySummerland Associates to help you achieve your goals. Making these small changes promptly will offer huge profits in your retirement years.
It's a mistake to put off retirement planning:
According to the Employee Benefits Research Institute, 60% of today's workers have not worked out how much they'll need to save for their retirement needs which is the first step in retirement planning. It's a rather difficult process, and the help of a financial planner can be invaluable when creating a step-by-step program which will take you to your goal. Take time to review asset assignment, monitor investment performance, and make changes as needed. Though it may not be convenient, failure to plan will lead to missed opportunities, lost tax benefits, and less than golden retirement years.
It's a mistake to believe your savings are safe:
In the past, finance advisers frequently told their senior clients to put 60% of their savings in bonds and 40% in stocks, with a switch to 80% bonds upon retiring. Their logic was to shelter pension savings by reducing investment risk. With longer life expectancies, many view this guidance as invalid. Inflation, growing faster than the modest returns of so-called safe investments, will at last eat away at your savings and reduce your buying power.
Today financial consultants advocate keeping the capability for growth in your portfolio up to and through retirement. A mix of products which will make you a real rate of return after inflation and taxes should boost your purchasing power over time or at the very least keep it steady while still minimising risk. Balance should be sought between investment security and ensuring you have lots of savings throughout 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 open to share your wealth with your family before you retire. While your children will definitely value a paid trip through university or your help buying their first house, giving away assets now can put you in a tight spot later on. No one knows with certainty what the future holds. You will live for longer than anticipated. You can need high-priced long-term medical care. If you've been too liberal with your savings, you may find yourself without. Always take the long term view whenever using your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your position needs:
Will you actually spend considerably less than you do now during your retirement years? During the past, a rough guide amongst planners was to expect post-retirement expenditures to be about 80 percent of your present ones. But this isn't always the situation. 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 costs like life insurance, health-care premiums, and co-payments are probably going to become more expensive. Also, Medicare does not cover things like dental, vision, hearing or skilled nursing costs.
As you contemplate 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 situation with a fee based certified financial planner ensuring they earn no commission fees on their guidance or selling you financial vehicles. Also be certain to put some of your savings to work using info and education like what's offered bySummerland Associates to help you achieve your goals. Making these small changes promptly will offer huge profits 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 ideas into a series of applied methods that drive the Summerland Alerts. More articles can be found on Summerland Associates website or via Wealth Building Ideas, published for iPads.
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