Are you considering retirement? If you want to retire in the next 10 to 15 years congratulate yourself for doing the due diligence necessary to smoothly transition into your golden years. Planning for your retirement is as much about avoiding common mistakes than it is following proven tips.
Not Having a Roadmap
Focus on building a roadmap as you approach a 5-7 year window around your retirement age. Consider how you will pay for big ticket expenses like your child’s college tuition without eating through your retirement funds. Ask yourself if you are saving enough money for retirement and consider if you will have enough income to retire. Identify sources of monthly income. Once you retire think through your options to create steady cash flow and ease any financial worries. If you are considering a senior retirement center, or relocating, start researching well in advance.
Not Working with a Licensed Financial Professional
Work with a retirement distribution specialist to pinpoint how to generate the income you need to live comfortably after retiring from your job. Partner with a broker during your accumulation stage to grow your nest egg as large as possible. Maximize savings and boost channels of income to save the most money for your retirement years through the help of a professional. You move into the distribution stage after you decide to retire. Seek advice from a specialist to generate income by positioning your portfolio. Doing so can provide you with tax breaks and maximum income for now and the future.
Not Setting Up a Number
You must understand your cash flow need before you can retire with confidence. Many who make this common retirement mistake give little thought to how much money they would need each month to live comfortably. You cannot possibly know the risk to take with your money and what retirement number you need to hit unless you designate a specific number to work off of. Making this mistake typically means you have shouldered more risk than you needed to and serious underperformance in down markets.
Someone who has hit their retirement number of $2 million but is unaware that they have done so exposes themselves to unnecessary risks during down markets. If, instead of positioning their portfolio to a conservative strategy to preserve their number and ensure retirement, they lose 25% of their $2 million the person will need to put off their retirement for a number of years.
No Post Retirement Plans
Some unclear people have the money in the bank but put off their retirement for fear of being bored or lonely. Smart retirees take up classes or follow their passions by taking up their hobbies full time. Consider doing charity work or some other activity which keeps you busy. Nothing is worse than having the means to retire yet dying on the job because you refused to plan out how you would choose to spend your golden years. Travel more, spend more time with your family or start an online business to find a purpose during your retirement years. If you have something to do you will not work past your retirement age or the time when you have sufficient funds in your portfolio to throw in the towel.