Retirement planning should begin early to minimize one of the largest risks - outliving your nest egg.
The biggest pitfalls to sound retirement planning are generally:
- Starting too late
- Failing to save sufficient amounts
- Improper investment choices
Ask yourself what are your needs at retirement? What age do you plan to retire? And how you are going to get there?
How do you make your retirement savings last? Ask yourself the following questions:
What are your needs at retirement?
Be realistic and honest about retirement expenses and your expectations. Estimate future expenses based on what you spend now. Then, consider those extras you’ve been planning for in retirement such as travel, a new hobby, more golf, as well as new expenses like out of pocket health insurance and treatment costs. Have you thought about future homecare needs? Basic budget considerations should include housing, transportation, utilities, communication (phone, cable, internet), food, clothing, leisure, gifts, charitable contributions, insurance premiums, healthcare. Remember to incorporate a budget buffer for unplanned add-on expenses – a celebration dinner, buying a set of new tires, or an appliance replacement.
What age do you plan to retire?
Today, people are both working and living longer. As you live longer, you require more years to stretch that retirement nest egg. By delaying retirement for as long as possible, your savings accumulate and investments can earn more interest, overall equating to an increase in your retirement income and financial security. Considering a slower transition to retirement by shifting to part time can also make a difference. Ultimately, working slightly longer means your money doesn’t have to work as hard - and once you do retire, you’ll have more money to spend.
How are you going to get there?
Start saving early. Develop a savings plan and set a budget. Small changes to your saving and investment habits are great places to start. And as cliché as it may be, it’s true - everything you can save today will increase your future retirement nest egg. The best way to increase your future budget is to decrease your current one, invest as much as you can, and take advantage of the magic of compound interest. Sacrifice today so you don’t have to in retirement.
We're here to help.
Our Wealth Planners welcome the opportunity to meet with you to develop a plan to ensure you have the funds you need as part of a complete financial strategy. Financial planning requires taking a careful look at your individual goals and deciding how you intend to achieve them. Once you determine what you want, you can make plans to help move from vision to reality, from where you are now to where you want to be in the future. Let us help guide you on your financial planning journey.
We'd love to speak with you to get started on a plan today.
