July 23, 2019
Retirement is a wonderful thing to achieve. The problem is 55% of retired people have regrets about their retirement savings.
Here are the top 3 regrets...
1. Did not save enough.
2. Relied too much on Social Security.
3. Did not pay down debt before retiring.
As I am preparing for retirement, I thought this was some very good information.
As always please reply with your thoughts and comments.
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1. Not Enough Savings..
A recent survey by Fidelity found 62% were confident about their current financial health.
When asked to look ahead to their retirement finances, the confidence changed.
Planning seems to be the culprit. Only 18% of the respondents had a financial plan for retirement. Without a plan it's hard to know if you have enough saved or will have enough.
It's not hard to create a plan. First think about amping up your savings. Look at what you are currently spending and try to cut out some stuff. Maybe it's a Starbucks run or two!
Then think about Medical Expenses. Another survey by Global Atlantic found that the most common financial surprises for retirees, are inflation and unexpected medical costs.
If you are still working consider and see if you qualify for a HSA (health savings account).
Now for the future! Picture your retirement and the lifestyle you want to live. How you'll fund it? Really get down to the nitty gritty. Me, for instance, I've figured in travel and golfing, both expensive! It is important to know what you'll spend money on so you can plan your savings amount around this definable goal.
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2. Relying Too Much On Social Security...
This is a sad fact for many seniors. The rely on their social security as the main source of income. It just isn't enough!
Start looking at what your projected to get in your early 50's. Remember Social Security was always meant to be supplemental income.
To make matters worse no one knows how Social Security benefits will change or whether the entire system will face an overhaul.
This means your planning should include other resources, including:
- Tax-advantaged retirement plans
- Taxable investment accounts
- Personal savings
- A health savings account
- Income from businesses or properties
It would be hard to do all of them, but you can increase your retirement income by working now to diversify your future income.
You may want to consult with a retirement planning specialist to assess your resources and to help with a plan.
Think about a withdrawal plan for when you do retire. A good withdrawal plan can add years of comfort to your retirement
3. Not Paying Off Debt Before You Retire...
Debt when you are on a fixed income makes it hard to enjoy retirement.
Work hard and systematically to pay off your debt. Focus on one at a time, preferably the highest interest rate one. Pay the most you can on this and make minimum payments on the others.
I can attest this works. Plus it gets to be fun and exciting as you get rid of another debt item!
The one caveat is, you can't focus too much on paying down your debt that you neglect your retirement savings. It's a balance.
Retirement consultants recommend to put 15% of income toward retirement, making sure to get every cent of any company match you're eligible for. That seems kind of high, but if you start to look at what you spend a month and on what I bet you'll find a couple of hundred dollars you can cut out to put towards paying off debt and savings.
For the most part, the best way to avoid retirement regret is planning. Start NOW! Evaluate your situation and create a retirement roadmap that helps you get from today to tomorrow.