Have you read any recent news reports about the future of retirement in America? If so, you might have heard that many Americans are feeling uneasy about their futures. The average lifespan is increasing, which sounds like good news, but it does mean we will be living on our retirement incomes for longer. When you couple that trend with the rising cost of healthcare and a sluggish economy, it’s easy to see why so many people are worried.
Luckily, projections cautiously predict an improving economy and with careful planning, a confident retirement is still within reach for most of us. The main source of financial woes in retirement comes from mistakes made years earlier, so learning these lessons can help you ward off potential problems in the future.
Failure to plan. The most common retirement mistake is that some people simply neglect to plan for it. You might have neglected your retirement savings throughout your twenties and thirties, so now is the time to play catch-up. Set aside time to meet with us, and we will help you set a savings goal and establish a plan to get caught up.
Inadequate savings. Another common mistake happens when people know they need to save for retirement, but they simply don’t save enough. Luckily, once you reach age 50, you can make additional catch-up contributions to your retirement plan each year. Always try to save the maximum, because you can prepare for retirement while also earning a valuable tax deduction.
Borrowing from yourself. Retirement fund loans can be tempting in times of financial distress, but they can be a terrible idea. You can never repay the time you have lost, and the compounding interest that you would have earned on the money you borrowed.
Paying for college instead of retirement. It’s only natural that you want to offer your children the best start in life. However, remember that there are many different ways to pay for college, and only one way to fund your retirement. Keep your retirement savings goals on track, and identify another way to cover that tuition bill.
Depending on Social Security. The Social Security program was designed as a supplement to retirement income, and that’s all it will probably ever be. Don’t make the mistake of depending too much on your Social Security checks, because it’s unlikely they will cover your entire cost of living.
We do have ways of planning for your Social Security benefits, as well as other financial planning strategies to help you stay on track. Give us a call, and we’ll be happy to help you put together a plan for long-term financial stability.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.