Folk make mistakes and occasionally we may learn from them presuming it isn't too late. Should you find a pretty serious planning mistake after you have picked up your last payslip, your retirement years are probably going to suffer. Fortunately , forewarned is forearmed, which means becoming educated about common retirement mistakes will help you to avoid them in days to come.
It's a mistake to postpone retirement planning:
In the opinion of the Employee Benefits Research Institute, 60% of today's employed 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 complicated process, and the help of a financial planner can be useful when making a step by step plan that 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, neglecting to plan will lead directly to missed opportunities, lost tax advantages , and less than golden retirement years.
It's a mistake to believe your savings are safe:
During the past, financial advisors regularly 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 protect retirement 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 cut back your purchasing power.
Today advisors endorse keeping the capability for growth in your portfolio up to and through retirement. A combination of products that will make you a real rate of return after inflation and taxes should raise your buying power over a period of time or at least keep it steady while still minimising risk. Balance should be sought between investment security and ensuring you have plenty of savings all though your retirement.
It's a mistake to be overly generous:
If you're among the lucky few that assume that they have masses of retirement savings, you could be tempted to share your wealth with your family before you retire. While your children will unquestionably value a paid trip through college or your help buying their first house, giving away assets now can put you in a tight spot later on. Nobody knows with certainty what the future holds. You will live longer than predicted. You'll need costly long-term medical therapy. If you've been too indulgent with your savings, you may find yourself without. Always take the longer view whenever utilizing your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your budget needs:
Will you really spend a lower amount than you do now during your retirement years? During the past, a rough guide among planners was to expect post-retirement outlays 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 money 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 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 future full of hope. Take the time to discuss your situation with a fee based certified financial planner ensuring they earn no commission fees on their information or selling you financial vehicles. Also be certain to put some of your savings to work using information and education such as what is offered bySummerland Associates to help fulfil your ambitions. Making these tiny changes as soon as possible will offer gigantic benefits in your retirement years.
It's a mistake to postpone retirement planning:
In the opinion of the Employee Benefits Research Institute, 60% of today's employed 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 complicated process, and the help of a financial planner can be useful when making a step by step plan that 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, neglecting to plan will lead directly to missed opportunities, lost tax advantages , and less than golden retirement years.
It's a mistake to believe your savings are safe:
During the past, financial advisors regularly 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 protect retirement 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 cut back your purchasing power.
Today advisors endorse keeping the capability for growth in your portfolio up to and through retirement. A combination of products that will make you a real rate of return after inflation and taxes should raise your buying power over a period of time or at least keep it steady while still minimising risk. Balance should be sought between investment security and ensuring you have plenty of savings all though your retirement.
It's a mistake to be overly generous:
If you're among the lucky few that assume that they have masses of retirement savings, you could be tempted to share your wealth with your family before you retire. While your children will unquestionably value a paid trip through college or your help buying their first house, giving away assets now can put you in a tight spot later on. Nobody knows with certainty what the future holds. You will live longer than predicted. You'll need costly long-term medical therapy. If you've been too indulgent with your savings, you may find yourself without. Always take the longer view whenever utilizing your savings and be mindful of the unforeseeable future.
It's a mistake to underestimate your budget needs:
Will you really spend a lower amount than you do now during your retirement years? During the past, a rough guide among planners was to expect post-retirement outlays 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 money 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 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 future full of hope. Take the time to discuss your situation with a fee based certified financial planner ensuring they earn no commission fees on their information or selling you financial vehicles. Also be certain to put some of your savings to work using information and education such as what is offered bySummerland Associates to help fulfil your ambitions. Making these tiny changes as soon as possible 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 ideas into a series of applied strategies that drive the Summerland Alerts. More articles can be found on Summerland Associates website or thru Wealth Building Ideas, published for iPads.
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