Are you prepared for retirement?
According to a survey by GoBankingRates, more than half of all Americans will enter retirement without adequate retirement savings. Typically, this is not true of our clients who tend to earn high incomes, invest wisely, and save faithfully for the future. We’re not worried that you haven’t made retirement savings and investment planning a priority.
However, that still doesn’t mean you are completely prepared for retirement. The reasons that so many people are neglecting to save for their futures might also impact you. If you believe in any of these common retirement myths, it’s possible you still need to tweak your retirement income plan.
“My cost of living will be lower in retirement.” It’s true that some of your monthly expenses might drop, particularly if you commute to work or incur significant business expenses. On the other hand, retirement offers you the one things that your working life doesn’t. You’ll have plenty of free time to pursue travel, hobbies, or other interests, so your cost of living might not drop at all. In some cases it might even rise.
“I don’t need a Will”. You’ve filled out those beneficiary forms for every investment account and life insurance policy. However, Wills can be contested, and there are many estate planning concerns that they do not address. You still need to meet with an attorney and draw up an end-of-life plan.
“Medicare covers 100 percent of healthcare needs once you turn 65”. We all pay Medicare taxes, and we’ll all reap the benefits when we turn 65, right? It’s true that you will become eligible for Medicare at that point, but it is not true that Medicare covers 100 percent of healthcare costs. You will still incur significant expenses for premiums, deductibles, co-pays, medications, equipment, and uncovered services. Currently, the official prediction is that a 65-year-old retiring today can expect to spend about $320,000 on medical care over the course of retirement.
“Once I retire, investing will be too risky”. Many investors elect to pursue a more conservative investment strategy once they transition into retirement. This can be a smart approach, but it doesn’t mean you have to stop growing your funds entirely. Consult with us about ways to invest conservatively, if your risk tolerance has changed.
“I’ve been saving for retirement all my life. I’ll have enough money”. This is a frequent mistake with high-income earners. You had the funds to invest and save wisely for retirement, so it’s easy to assume that you’ll have plenty of income. But it’s better to be sure than make assumptions. Call us for an appointment and we’ll assess your retirement strategy, identify areas of possible improvement, and help you maximize your financial potential.