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Category Archives: Retirement

4 Reasons Your Retirement Plan Might Fall Short

May AOTM

Ever find yourself daydreaming about retirement? Whether your dream retirement entails traveling the world, dedicating time to beloved hobbies, or helping your children and grandchildren, saving enough for retirement is critical to enjoying all of these endeavors. Everyone deserves the best retirement possible, but numerous planning mistakes can cause retirement plans to fall short.

According to recent studies, retirement savings look grim for many Americans for reasons such as living longer, expensive medical care, and the rising cost of living. One survey showed that 45% of all Americans have saved nothing for their retirement, including 40% of Baby Boomers. This trend continues with younger generations too, with a recent report from The National Institute on Retirement Security showing that 66% of Millennials haven’t saved a penny towards their retirement.

May AOTM

(Credit: Time/GoBankingRates)

If you have started saving for retirement, you’re definitely ahead of the curve. However, you could still be engaging in some of the biggest retirement planning mistakes—without even realizing it. How can you save enough to thoroughly enjoy your ‘golden years,’ without hurting your finances in the meantime? Here are 4 retirement planning mistakes worth avoiding:

Mistake #1: Focusing on the Return Rate

If you have an investment that produces a high rate of return, it’s easy to get caught up in always pursuing that outcome. However, be wary of that type of bias, as it could negatively impact your future investments. Rather than chasing rates of returns, shift your focus to creating a diversified portfolio that spreads out investments through a variety of fund types. This might include balanced, index, equity, or global. Working with a financial advisor that helps you diversify your portfolio can help protect your retirement savings if/when the economy goes sideways. Plus, they’ll help you discover investments that match your retirement goals and risk tolerance.

Mistake #2: Retiring Too Early

Many of those saving for retirement aren’t saving as much as they need to continue their lifestyle during retirement. If that sounds like your situation, then possibly consider staying in the workforce a little longer and wait to take your Social Security benefits. This will allow you to save longer and also maximize your benefits if you don’t apply for them at age 62.

Additionally, Social Security data shows that around 33% of retirees live until 92 years old, and 75% of retirees apply for benefits as soon as they hit 62. With this in mind, pushing retirement back a bit could benefit you in the long-run.

With that said, pushing back retirement isn’t the best option for everyone. There are many reasons to retire as soon as you can, such as having health issues or other life circumstances that encourage early retirement. Whether you plan to retire early or need to retire later than expected, working with a financial advisor can help you determine the best way to prepare yourself for your specific retirement needs.

Mistake #3: Not Saving Consistently

One of the worst retirement mistakes to avoid is saving too little now and hoping you can ‘catch up’ in the future. The truth is, catching up rarely happens, and unexpected life circumstances can make catching up impossible in some cases.

According to the Center for Retirement Research at Boston College, the median retirement account balance for 55 to 64-year-olds was just over $110,000. If this money had to stretch over 20 to 25 years (which it likely will as people are living longer), it amounts to just over $400 per month to live on. We can see this is just not realistic in today’s world.

To save more, create a budget, cut out unnecessary spending, open a 401(k) through your employer or an individual retirement fund as a self-employed individual, and save extra money with each raise or bonus you receive from work. Working with a financial advisor is one way to shed light on other financial strategies to boost your retirement savings.

Mistake #4: Not Factoring Taxes into the Equation

 Another common mistake made during retirement is forgetting about taxes and their effect on your savings. Tax deductions change for many people once in their in retirement, and some retirees end up paying more in taxes. Consider speaking with a financial professional about tax-free withdrawals from Roth IRAs or about timing withdrawals from accounts that will be taxed.

Want to avoid other retirement saving mistakes and create a personalized retirement plan? Contact us today for a complimentary consultation.

7 Small Changes You Can Make Today to Retire Sooner

You probably started thinking about retirement the day you entered the workforce. For some of us, retirement is very far off. For others, it’s right around the corner. No matter what stage of life you’re at, PA retirement income planning should always be at the top of your mind.

What if you haven’t saved enough for retirement? Or worse, what if you haven’t saved anything at all? Relax and take a deep breath. All hope isn’t lost. There are seven small changes you can make today that will help you save more money and may even help you retire sooner.

Continue reading "7 Small Changes You Can Make Today to Retire Sooner"

Planning For 100: 6 Ways to Retire With Financial Independence

Are you prepared for retirement?

If the answer is no, you’re not alone.

1 in 3 Americans have zero retirement savings. This includes people who are quickly approaching retirement (ages 50-64). Even those who are saving aren’t putting away very much.

This is especially troubling since people are living longer. That means there are a lot of people who won’t be able to keep up their lifestyle during retirement. I always tell my clients to plan as if they’re going to live to 100 (never say never – the oldest woman who ever lived was 122!).

If you haven’t been saving for retirement or if you haven’t saved enough, it’s not too late to turn things around. No matter which stage you’re at, here are six ways to retire with financial independence: Continue reading "Planning For 100: 6 Ways to Retire With Financial Independence"

Planning for Uncertainty

Do you find yourself in one of these situations?

I’m thinking about getting divorced but haven’t taken that first step.

I’m getting divorced and my attorney isn’t helping me get the settlement I want.

I just got divorced and I have no idea how to manage the household finances.

I’m retiring and I want to make my money last as long as I do.

I haven’t saved enough for retirement.

I’m getting a divorce and I’m close to retirement.

Divorce and retirement have one thing in common: uncertainty. Especially when it comes to money. Continue reading "Planning for Uncertainty"

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