It can be challenging for people who are planning their retirement to balance the life they want to live right now with the life they eventually want to live once they’re retired. The retirement planning process itself can be the source of a lot of anxiety, particularly for that reason.
With the right information, you can avoid some of these common retirement planning mistakes and take a lot of the stress out of the process:
Living too large too soon. Exactly how much monthly income do you need to maintain your current lifestyle once you are retired? A high estimate might make your retirement seem like an unattainable goal, while a low estimate could lead to some significant financial problems later in life. Most experts say you should plan on 80 percent of your current annual income once you are retired, but it’s always better to overestimate how much you need.
Not taking future health care into account. People often fail to consider how much their health care needs will increase as they get older. You also can’t assume you’ll be covered by Medicare for your health expenses, as the costs for Medicare for retirees continue to go up every single year.
Not making plans for long-term care. According to information released by the United States Department of Health, approximately 70 percent of people over 65 will eventually require care. It’s important to plan for this in your retirement savings so you are prepared should you eventually count yourself among that 70 percent.
Not updating your plans regularly. You should revise your retirement plan every few years to take into account major life events, such as a marriage or the birth of a new child, as well as the state of the markets and your income level.
You can avoid some of these mistakes by getting in touch with the team at Money Mastery today to begin talking about your retirement planning strategy. We look forward to working with you!