Planning for the day you retire is never as easy as it seems. Changing laws, growing costs of living, and overlooked needs and aspects of retiring can become overwhelming the closer you get to the big day. It is too easy to fall into the trap of believing that blindly saving something is fine, and all will work out in the end.
While no one can truly estimate annual fluctuations and changes, there are a few tempting pitfalls that you can amend now to save your future as a retiree. We've made a shortlist of serious, but common mistakes many individuals make on the path to your last day of work.
Working Couple, Single Saver
Families in which both spouses work are nearly the norm today, but the same cannot be said for both spouses saving for retirement. With increasing frequency, there is only one saver in many households. If you plan to keep up with your current lifestyle and expenditures, then one saver for a two-worker household will make this quite difficult. It is important to note that it is not impossible, and many couples eventually manage with one saver once retirement hits. However, if both couples save for retirement, there will be much more overall income to go around, and that means more time doing the things you enjoy and less likelihood of needing a job after you retire.
Static Retirement Plan
The worst thing you can do with your retirement plan is to make it once and leave it alone. Your plan needs to evolve and adapt with the changing times instead of being bogged down with outdated expectations. This is not to say that you must alter your retirement plan every quarter, or even every year. Just keep in mind that a five-year-old retirement plan may no longer be doing your plans justice. Knowing what to look for and the best adjustments to make is not a simple task for the average person. Financial advisors with a core focus on the process of retiring can help you remain informed of important developments and provide guidance on the ideal courses of action.
It is not enough to save for your retiree without a calculated budget or plan. Your savings need to be able to match and support the lifestyle you wish to have, with extra for when unexpected events occur. Far too many people reliably store a portion of their money away with no real consideration to the lifestyle it will ultimately support. If you continue your pattern of saving, are you aware of how much your monthly budget will be after you retire? Are you confident that you can live happily and healthily on that budget without needing additional assistance? This is a case where the math truly matters and inaction now can mean trouble down the road. In the end you must ask yourself one question: Do you wish to survive retirement or enjoy it?
Planning for the day you retire is a constantly evolving process that can frustrate even the most well-prepared individuals. Saving what you can instead of what you need should only be a last resort and not a long-term plan. Don't let yourself get overwhelmed and leave your gameplan inadequate and collecting dust. Work hard to avoid making major mistakes that can add stress to your days as a retiree. For financial, retirement, and estate planning assistance, contact BD Financial Concepts today.
We are a professional financial services firm located in Sanford, Central Florida.