Will You Be Ready For Retirement?
2013 was a great year for those who had lost a large percentage of their retirement nest egg in the 2008 financial crisis, however many more Americans are finding themselves in the boat of having never saved enough for retirement. As each year brings you closer to that day when you will one day exit the work force (either voluntarily or due to some long-term health problem) the need to be financially prepared becomes more imminent. Most Americans are horribly underprepared for retirement and are in danger of running out of money during their retirement years. If this fear resonates with you, it is time to take a hard look at your saving and spending habits and make a realistic plan to get your finances in shape for retirement.
Determine How Much You Will Need To Save For Retirement
How much money you will need to save for retirement is different depending on your individualized retirement goals. If you hope to retire at the age of 60, then you will need substantially more set aside than someone who plans to retire at a much later age. Additionally, if your plan is to travel abroad and eat at fine restaurants, your financial outlay will be greater than the retiree who plans to live in their small, already paid for home in the country. Only you can determine your retirement goals, but the lifestyle you plan to pursue later will have a tremendous bearing on your financial planning today.
Avoid The Financial Pitfalls That Family Members Can Create
As much as we love our family/children and would do anything to help them out in a pinch, it is important to not allow our family members to destroy our retirement savings. If a Child is running into a bind financially, or in need of some help with college tuition, it is never a good idea to tap into your retirement fund to help him or her out. Once you have set that precedence it can be nearly impossible to get back on track for retirement. Even though the financial outlay may seem like the loving thing to do at the time, becoming a burden to your children financially later on in life is certainly not the most loving thing to do.
It Is Possible To Run Out Of Money In Retirement
As horrible as it may seem, the reality of the situation is that many individuals may not have enough money saved for retirement, and could actually run out of money during retirement. As life expectancy gets longer, and financial obligations increase, more and more people will find that they have underprepared for retirement. Some possible reasons for running out of retirement money include:
-Not figuring in the impact of inflation on your retirement savings
-Underestimating the cost of healthcare during retirement
-Underestimating your life expectancy or your spouse’s life expectancy.
-Carrying a debt burden into retirement
-Drawing from Social Security too early, thereby diminishing your Social Security payments.
-Investing either too conservatively or taking on too much risk with your retirement portfolio.
For more information on how to properly and effectively save for retirement, and to take steps to avoid running out of retirement money during retirement, speak to a Redhawk Wealth Advisor near you today.