There is a day in the future you are probably looking forward to with great anticipation and also some anxiety: your retirement day.
Mixed emotions about a major life transition like retirement are very understandable. The positive outlook of making your own schedule and spending time on your favorite hobbies is a time we all look forward to. But there is also the added pressure of feeling confident that you will have the financial wherewithall to enjoy those years.
Planning is one of the most important factors in every decision that people make. Planning is the key to success in every activity. Disorganized or false facts and information can be the cause of unwanted problems and worries in your golden years when you should be enjoying life.
Planning for retirement is a very important issue that you should not neglect or take for granted. To make things a lot easier, there are steps that are especially important for people who wish to plan their retirement. Why not? This is the most important part of your “after-career” life.
Retirement planning will create a clear path to secure your money. Your retirement plan will depend on your specific goals. Do you plan to travel after you retire? Or do you plan to stay home and enjoy new hobbies? Do you plan to spend more time in charitable activities? Do you plan to move to a smaller, easier-to-manage home? Do you have the kind of medical coverage that will assure you and your loved ones of good care during your retirement years? Will you have adequate income for your daily needs as well as your planned activities?
Some people don’t pay any attention to these important questions until they are just about ready to retire. As a result, it adds a lot of burden and stress to their lives – and the lives of their loved ones. You can avoid having retirement sneak up on you by planning it early. The sooner you plan for your retirement, the more income you will eventually have and the more you will enjoy retirement when it comes.
Here are some tips to avoid common mistakes when planning your retirement:
Withdrawing money from your retirement plan is never advisable except in the most extreme situations.
Withdrawing from your retirement account will mean losing the valuable interest that has accrued. This will reduce future interest you earn on that account and keep it from building into a larger nest egg. You could face penalties or early withdrawal fees. Some plans allow you to have withdrawals or loans but you must be extra careful in taking advantage of these withdrawals.
Invest as much money into your company retirement plan as you can for as long as you can afford it. You should invest enough to get your company matching funds if they are offered. Even small amounts can grow into very large accounts over time.
Always monitor your investments on a regular basis. Only then will you be aware of any discrepancies or unexpected downturns in your plan. You will also know how your investments are doing and whether you should beef up your plan even more.
Do not rely too much on social security. You should always have other means of income as a back up. It is advisable to have a 401K retirement plan, an IRA, and your personal savings. In this day and age, we’ve seen too many large companies defaulting on their pension plans. And every year, politicians talk more and more about cutting back on social security. Have you ever wondered whether the social security system will survive the coming retirement of the baby boom generation? You should think about this and plan accordingly.
Each person should have their own separate retirement plan for the best retirement security. If one spouse relies on his/her spouse’s retirement plan for his/her retirement, he/she could be in for a very sad surprise. The spouse with the retirement plan could die leaving the other spouse with no income.
Forgetting to review your plan on a regular basis could mean losing a portion of your retirement income. You have to review this to be able to insure you are making the most income possible for your plan. It is advisable to also investigate every alternative to see if their are other plans that will earn more.
The bottom line is to take your retirement planning efforts seriously, broaden your mind for your investments, save regularly, and always keep your goals in mind. That will insure that you enjoy your golden years comfortably!