People make mistakes and sometimes we might learn from them assuming it's not too late. If you find a rather serious planning error after you have collected your last paycheck, your retirement years are likely to suffer. Luckily , forewarned is forearmed, meaning finding out about common retirement mistakes will help you avoid them in the future.
It's a mistake to postpone retirement planning:
According to the Employee Benefits Research Institute, 60% of today's employees have not calculated how much they'll have to save for their retirement needs which is the 1st step in retirement planning. It is a rather complex process, and the help of a financial planner can be useful when making a step by step program which will take you to your goal. Take time to review asset assignment, 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 is a mistake to believe your savings are safe:
During 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 retirement. Their logic was to shelter retirement savings by reducing investment risk. With longer life expectancies, many view this information 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 purchasing power.
Today counsellors advocate keeping the capability for growth in your portfolio up to and through retirement. A combination of products that will get you a real 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 minimising risk. Balance should be sought between investment security and making sure you have lots of savings throughout your retirement.
It's a mistake to be very generous:
If you're among the fortunate few that assume that they have masses of retirement savings, you may be inclinded to share your wealth with your family before you retire. While your kids will definitely appreciate a paid trip through college or your assistance purchasing their first house, giving away assets now can put you in a tight spot later . Nobody knows with certainty what the future holds. You may live longer than expected. You may need high-priced long term hospital therapy. If you've been too generous with your savings, you may find yourself without. Always take the long view whenever tapping into your savings and be mindful of the unforeseeable future.
It's a mistake to belittle your position needs:
Will you spend less than you do now during your retirement years? In the past, a rule among planners was to expect post-retirement expenditures to be about 80 % of your current ones. But this is not always the case. While you may not be commuting to the office each 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 likely to go up. Also, Medicare does not cover things like dental, vision, hearing or skilled nursing expenses.
As you contemplate what you need for retirement, your future is at stake from your happiness to your economic security. Avoiding mistakes will help you create a more optimistic future. Spend the 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 products. Also be sure to put some of your savings to work using info and education such as what's offered bySummerland Associates to help you achieve your goals. Making these small changes as soon as possible will offer huge benefits in your retirement years.
It's a mistake to postpone retirement planning:
According to the Employee Benefits Research Institute, 60% of today's employees have not calculated how much they'll have to save for their retirement needs which is the 1st step in retirement planning. It is a rather complex process, and the help of a financial planner can be useful when making a step by step program which will take you to your goal. Take time to review asset assignment, 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 is a mistake to believe your savings are safe:
During 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 retirement. Their logic was to shelter retirement savings by reducing investment risk. With longer life expectancies, many view this information 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 purchasing power.
Today counsellors advocate keeping the capability for growth in your portfolio up to and through retirement. A combination of products that will get you a real 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 minimising risk. Balance should be sought between investment security and making sure you have lots of savings throughout your retirement.
It's a mistake to be very generous:
If you're among the fortunate few that assume that they have masses of retirement savings, you may be inclinded to share your wealth with your family before you retire. While your kids will definitely appreciate a paid trip through college or your assistance purchasing their first house, giving away assets now can put you in a tight spot later . Nobody knows with certainty what the future holds. You may live longer than expected. You may need high-priced long term hospital therapy. If you've been too generous with your savings, you may find yourself without. Always take the long view whenever tapping into your savings and be mindful of the unforeseeable future.
It's a mistake to belittle your position needs:
Will you spend less than you do now during your retirement years? In the past, a rule among planners was to expect post-retirement expenditures to be about 80 % of your current ones. But this is not always the case. While you may not be commuting to the office each 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 likely to go up. Also, Medicare does not cover things like dental, vision, hearing or skilled nursing expenses.
As you contemplate what you need for retirement, your future is at stake from your happiness to your economic security. Avoiding mistakes will help you create a more optimistic future. Spend the 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 products. Also be sure to put some of your savings to work using info and education such as what's offered bySummerland Associates to help you achieve your goals. Making these small changes as soon as possible will offer huge 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.