Tuesday, May 8, 2012

Common Mistakes with Retirement Planning

The biggest mistake in retirement planning is not planning at all. I know many families who cannot afford to retire because they failed to save money when younger.

So let's assume you are planning and are saving. Moneyland at Time.com has identified The 7 Biggest Retirement Planning Mistakes
  1. Assuming you can work until age X
    Two in five retire before they had planned to due to illness or job loss. So start early!
  2. Ignoring Taxes
    Take advantage of IRA's and 401(k) reduce the taxes you'll spend for access to your money
  3. Not saving enough for Medical
    The average couple who retires at age 65 will spend $285,000 in health-care costs!!!
  4. Failing to Establish a Lifetime Income
    Few now-a-days (other than union or government workers) will have a pension for life. The article suggests an "immediate fixed annuity" to supply cash flow.
  5. Retiring too soon
    You get less from Social Security if you draw from it the first year you are eligible.
  6. Underestimating how long you'll live
    Many will live to 95 or 100 and outlive the money they saved
  7. Spending your retirement too quickly
    Spend no more than 4% of retirement savings each year.

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Anonymous Anonymous said...

Long-term annuities are a great way to ensure a steady flow of income during retirement. They allow for a sum of cash to be set aside, then funds are provided at a certain time period determined upon creation. One issue many have with this system is when a large amount of money is needed all at once, rather than small amounts over time. This is when selling the annuity becomes an option. Doing so will net you a lump sum of cash for settlement. This option is usually taken in times of emergency. Hope this was helpful.

July 11, 2012 at 10:31 AM  

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