“When it comes to preparing for retirement, the devil is in the details. Just one slip-up can derail your plans.”
Kiplinger’s recent article, “5 Common Roadblocks That Can Shut Down Retirement Success,” reports that numerous studies say most people aren’t properly preparing for retirement. According to the Economic Policy Institute, “nearly half of families have no retirement account savings at all.” Many who do save, don’t have what they’ll need to maintain a comfortable lifestyle for what could be a decades-long retirement.
Here are five of the most common obstacles to a successful retirement:
Not defining how you want to live during your retirement years. You may believe that your expenses will decrease when you retire. However, many folks find out this isn’t true with travel, hobbies, and other pursuits that fill their free time. Calculate the costs of the things you want to do and factor in inflation. Before retiring, you should also figure out how you’ll want to spend your retirement years. By setting some specific personal goals, you can be more exact with financial planning.
Not committing to financial success. Create a budget and track your monthly expenses. This is a critical part of planning for what your retirement income needs will be. You have to take this step for yourself. It’s not something that anyone else can do for you.
Failing to plan for the unexpected. Everyone needs a Plan B—a contingency plan. Life happens, like disability, divorce, and unexpected death, any of which could throw a wrench into your savings and retirement plans. Consider insurance (life, disability, and long-term care) as a good base of your financial plan.
Ignoring employer-sponsored plans. Some believe that they can’t afford to participate in their employer’s 401(k) plan or fail to review other benefits the company offers, like disability or life insurance. These employer-sponsored programs can be a very cost-effective way to help protect yourself and your family against the unexpected.
Having no comprehensive financial plan. Retirement means no paycheck, and everyone has concerns about saving enough money to be comfortable for the rest of their life. This even includes leaving something behind for their loved ones and favorite causes. A comprehensive plan can help you to make certain that you have addressed all of your issues. This plan should include asset allocation, income sources and budgets.
Reference: Kiplinger (March 2017) “5 Common Roadblocks That Can Shut Down Retirement Success”