People make mistakes and occasionally we may learn from them assuming it is not too late. If you find a rather serious planning mistake after you have collected your final paycheck, your retirement years are probably going to suffer. Fortunately , forewarned is forearmed, meaning learning about common retirement mistakes will aid in avoiding them in times to come.
It is a mistake to put off retirement planning:
According to the Employee Benefits Research Institute, 60% of today's workers have not figured out how much they'll need to save for their retirement needs which is the 1st step in retirement planning. It is a rather difficult process, and the assistance of a financial planner can be invaluable when creating a step-by-step roadmap which will take you to your goal. Take the time to review asset allocation, monitor investment outcomes, and make changes as needed. Though it may not be convenient, failure to plan will lead directly to missed opportunities, lost tax advantages , 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 retiring. Their logic was to shelter pension nest eggs by reducing investment risk. With longer life expectancies, many view this advice as invalid. Inflation, growing faster than the modest returns of supposed safe investments, will at last eat away at your savings and decrease your buying power.
Today financial consultants recommend keeping the potential for growth in your portfolio up to and through retirement. A mix of products which will earn you a genuine rate of return after inflation and taxes should increase your buying power over a period of time or at the very least keep it steady while still reducing risk. Balance should be sought between investment security and making sure you have lots of savings through your retirement.
It is a mistake to be very generous:
If you're among the fortunate few that assume that they have lots of retirement savings, you could be tempted to share your wealth with your family before you retire. While your kids will certainly appreciate a paid trip through college or your assistance buying their first house, giving away assets now can put you in a difficult spot later . No one knows with certainty what the future holds. You'll live for longer than anticipated. You can need costly 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 utilizing your savings and be aware of the unforeseeable future.
It's a mistake to belittle your position needs:
Will you really 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 percent of your current 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. And, certain costs like life insurance, health-care premiums, and co-payments are probably going 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 risk from your happiness to your monetary security. Avoiding mistakes will help you create a future full of hope. Spend some time to discuss your present position with a fee based certified financial planner making sure 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 such as what's offered bySummerland Associates to help you fulfil your ambitions. Making these tiny changes as soon as possible will offer large profits in your retirement years.
It is a mistake to put off retirement planning:
According to the Employee Benefits Research Institute, 60% of today's workers have not figured out how much they'll need to save for their retirement needs which is the 1st step in retirement planning. It is a rather difficult process, and the assistance of a financial planner can be invaluable when creating a step-by-step roadmap which will take you to your goal. Take the time to review asset allocation, monitor investment outcomes, and make changes as needed. Though it may not be convenient, failure to plan will lead directly to missed opportunities, lost tax advantages , 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 retiring. Their logic was to shelter pension nest eggs by reducing investment risk. With longer life expectancies, many view this advice as invalid. Inflation, growing faster than the modest returns of supposed safe investments, will at last eat away at your savings and decrease your buying power.
Today financial consultants recommend keeping the potential for growth in your portfolio up to and through retirement. A mix of products which will earn you a genuine rate of return after inflation and taxes should increase your buying power over a period of time or at the very least keep it steady while still reducing risk. Balance should be sought between investment security and making sure you have lots of savings through your retirement.
It is a mistake to be very generous:
If you're among the fortunate few that assume that they have lots of retirement savings, you could be tempted to share your wealth with your family before you retire. While your kids will certainly appreciate a paid trip through college or your assistance buying their first house, giving away assets now can put you in a difficult spot later . No one knows with certainty what the future holds. You'll live for longer than anticipated. You can need costly 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 utilizing your savings and be aware of the unforeseeable future.
It's a mistake to belittle your position needs:
Will you really 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 percent of your current 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. And, certain costs like life insurance, health-care premiums, and co-payments are probably going 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 risk from your happiness to your monetary security. Avoiding mistakes will help you create a future full of hope. Spend some time to discuss your present position with a fee based certified financial planner making sure 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 such as what's offered bySummerland Associates to help you fulfil your ambitions. Making these tiny changes as soon as possible will offer large 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 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.
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