People make mistakes and sometimes we may learn from them presuming it's not too late. If you find a pretty serious planning blunder after you've picked up your final paycheck, your retirement years are probably going to suffer. Fortunately , forewarned is forearmed, which means finding out about common retirement mistakes will help you avoid them in the future.
It's a mistake to put off retirement planning:
According to the Employee Benefits Research Institute, 60% of today's employed workers have not determined how much they'll need to save for their retirement desires which is the first step in retirement planning. It's a rather complex process, and the help of a financial planner can be invaluable when creating a step-by-step roadmap which will take you to your goal. Spend a little time to review asset allocation, monitor investment outcomes, and make changes as needed. Though it may not be convenient, failing to plan will lead on to missed opportunities, lost tax advantages, and less than golden retirement years.
It is a mistake to believe your savings are safe:
During the past, finance advisers 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 retirement savings 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 cut back your buying power.
Today financial consultants recommend keeping the capability for growth in your portfolio up to and through retirement. A mix of products that will make you a real rate of return after inflation and taxes should raise your purchasing power over a period or at a minimum keep it steady while still reducing risk. Balance should be sought between investment security and ensuring you have plenty of savings throughout your retirement.
It is a mistake to be excessively generous:
If you're among the fortunate few that think they have lots of retirement savings, you may be inclinded to share your wealth with your family before you retire. While your kids will certainly think highly of a paid trip through college or your assistance buying their first house, giving away assets now can put you in a difficult spot later on. No one knows with certainty what the future holds. You'll live longer than anticipated. You may need pricey long term medical therapy. If you've been too generous with your savings, you may find yourself without. Always take the long term view whenever tapping into your savings and be mindful of the unforeseeable future.
It is a mistake to underestimate your financial position needs:
Will you spend 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 % of your present ones. But this isn't always so. While you may not be commuting to the office every day, or laying out 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 likely to increase. Also, Medicare does not 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 financial security. Avoiding mistakes will help you create a future full of hope. Spend some time to discuss your current position with a fee based certified financial planner making sure they earn no commission fees on their information or selling you financial vehicles. Also be sure to put some of your savings to work using info and education such as what is offered bySummerland Associates to help attain your goals. Making these little 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 employed workers have not determined how much they'll need to save for their retirement desires which is the first step in retirement planning. It's a rather complex process, and the help of a financial planner can be invaluable when creating a step-by-step roadmap which will take you to your goal. Spend a little time to review asset allocation, monitor investment outcomes, and make changes as needed. Though it may not be convenient, failing to plan will lead on to missed opportunities, lost tax advantages, and less than golden retirement years.
It is a mistake to believe your savings are safe:
During the past, finance advisers 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 retirement savings 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 cut back your buying power.
Today financial consultants recommend keeping the capability for growth in your portfolio up to and through retirement. A mix of products that will make you a real rate of return after inflation and taxes should raise your purchasing power over a period or at a minimum keep it steady while still reducing risk. Balance should be sought between investment security and ensuring you have plenty of savings throughout your retirement.
It is a mistake to be excessively generous:
If you're among the fortunate few that think they have lots of retirement savings, you may be inclinded to share your wealth with your family before you retire. While your kids will certainly think highly of a paid trip through college or your assistance buying their first house, giving away assets now can put you in a difficult spot later on. No one knows with certainty what the future holds. You'll live longer than anticipated. You may need pricey long term medical therapy. If you've been too generous with your savings, you may find yourself without. Always take the long term view whenever tapping into your savings and be mindful of the unforeseeable future.
It is a mistake to underestimate your financial position needs:
Will you spend 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 % of your present ones. But this isn't always so. While you may not be commuting to the office every day, or laying out 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 likely to increase. Also, Medicare does not 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 financial security. Avoiding mistakes will help you create a future full of hope. Spend some time to discuss your current position with a fee based certified financial planner making sure they earn no commission fees on their information or selling you financial vehicles. Also be sure to put some of your savings to work using info and education such as what is offered bySummerland Associates to help attain your goals. Making these little 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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