Retirement planning is not a simple task as it involves diligent research and constant reanalyzing for it to be successful. Yet, even with that, there are a couple of mistakes people tend to make when it comes to retirement planning.
One of the biggest problem when it comes to retirement planning is that people tend to dream, but not put realistic numbers on each of the dream they hope to eventually realize. When this happens, a person can feel like they have enough to survive, but not enough to enjoy their retirement. What you can do to prevent this is to list a number of things you would like to accomplish during your retirement, and how much you would spend on them, including your living expenses. On the other hand, should you want to continue earning an income after retirement, you can consult a retirement income planner to help you find out how this can affect your retirement planning.
Not taking inflation into account can also be another mistake. Today it may not seem like anything, but in the future if inflation does occur, the amount of money you save according to a plan without accounting for inflation can become a small amount. Hence, always take into account a realistic number for inflation, like 4%. This way, you will be able to live comfortably despite the rise in prices.
While you cannot predict how long you will be able to live, there is a likelihood that you may live longer than the average. However, people tend to use the average life expectancy in their calculations, which is rather dangerous actually, because you may end up living longer than that and have not saved enough for those remaining years. It is best to expect that you live longer and have more than enough money.
Last but not least, people tend to take the easy way out, counting on Social Security as their sole retirement plan. While this is one of the simpler ways of retirement planning since it is provided by the government, the presence of inflation can cause the value of your Social Security benefits to lessen, especially if the government decides to cut these benefits in order to balance out the federal budget. Due to the uncertainty of the Social Security’s future, it is best that people make use of other retirement plan options as well.
All in all, you should make your retirement plan a priority, putting effort into creating a perfect plan. If you must, hire professionals like retirement income planner, attorneys, or even tax advisors to help you create a suitable retirement plan for yourself.