As more baby boomers approach retirement, their dreams of travel give way to concerns about how to fund those golden years. Rido ShutterstockIt’s difficult to plan for retirement.It’s understandable that we make mistakes along the way.
There are numerous factors to consider, including when to take Social Security, when to claim your 401(k), and more.The choices you make now will have far-reaching consequences in the future.
That’s why going it alone is a bad idea.
According to a Northwestern Mutual study, 71% of U.S.SAdults acknowledge that their financial planning could be better.Only 29% of Americans, on the other hand, work with a financial advisor.
Working with a financial adviser has different value for different people, but according to an independent study, people who work with a financial adviser feel more at ease about their finances and may have 15% more money to spend in retirement.
This free online service makes the difficult task of finding a financial advisor much easier.A quick questionnaire can help you find up to three local fiduciary financial advisers who are all legally obligated to work in your best interests.The entire process takes only a few minutes, and you can often be connected with an expert for a free retirement consultation right away.
Start now if you’re ready to be matched with local advisers who can help you achieve your financial goals.
Meanwhile, here are seven of the most common retirement blunders, along with advice on how to avoid them.
Leaving retirement planning to the last minute
Nobody wants to think about retirement, but ignoring it could mean the difference between a happy retirement and a stressful one.A comprehensive plan can help you manage risk and ensure that your savings will outlast you and cover your retirement expenses dollar for dollar.
The first step in making your retirement plan a reality is determining how much money you’ll need.The second step is to think outside the box about how you’ll get there.Together, they form a solid strategy.
When planning for retirement, it’s also important to consider a variety of factors, such as which types of investments to prioritize and how to reduce potential tax liability.This takes time and expert guidance.However, once you have a plan in place, it is much easier to stick to it and achieve your retirement goals sooner than you might expect.
It’s easier to put together a successful retirement plan when you have someone to assist you.Seek the advice of a qualified financial planner to analyze your income and expenses, calculate how much money you’ll need to retire comfortably, and create a comprehensive financial plan to help you get there.
In just five minutes, you can connect with three qualified financial advisers in your area using this free matching service.
Putting off retirement planning
According to a recent Bankrate survey, Americans’ biggest financial regret is not saving enough for retirement.People frequently postpone saving for retirement, but the longer they wait, the more difficult it will be.
Now is the time to start saving, no matter where you are on your savings journey.There are numerous advantages to beginning early. You still have time on your side.Compound interest works in your favor rather than against you.The longer you invest, the longer your money will have to grow.
Consider this: if you save $500 per month for 40 years and earn a 5% annual return, you’ll have nearly 725000 dollars.If you double that return to 10%, you’ll be able to retire with almost twice as much money.7 million dollars is more than enough to cover your expenses and leave money over for travel or other purposes.
A financial adviser may be able to help you catch up on retirement savings and figure out how much you need to invest to meet your savings goal if you are behind.A financial adviser can help with budgeting and debt repayment in addition to investing for the future.
If you’re considering retiring soon, you might fantasize about quitting your job and traveling the world.However, there are a few reasons why you should reconsider your decision before calling it quits.First, you may live longer than expected, encounter unexpected health problems, or face difficult financial times that force you to make budget cuts.
That isn’t to say you shouldn’t retire early, but if you do, make sure your savings will cover your expenses during retirement and that you plan for a lifetime of income.
If you’re approaching retirement, consult a financial planner to determine the best time to retire based on your unique circumstances.
Choosing the incorrect financial advisor
Hiring a financial adviser is a major life decision, whether it’s to build wealth or to ensure a comfortable retirement.Regrettably, not every adviser is created equal.If you hire the wrong person, you may end up worse off than you were before.
When you’re ready to hire someone, meet with a few planners and learn about their qualifications before making a decision.You wouldn’t settle for bad medical advice or incompetent mechanic advice, and you shouldn’t settle for bad retirement advice from an unqualified adviser.
Finding a trustworthy financial adviser doesn’t have to be difficult these days.Begin your search by using this free financial adviser matching tool, which can connect you with up to three qualified financial advisers in as little as five minutes.Each adviser has been thoroughly vetted and is a fiduciary, meaning they are legally bound to act in your best interests.
Start now if you’d like to be matched with local advisers who can help you achieve your financial goals.
Not being able to manage investment risk
Many people make this mistake when it comes to investing: they maintain the same level of risk as they get older.Growing older brings with it a greater sense of financial urgency, but that doesn’t mean you should suddenly become less frugal with your money.
Investing in your retirement does not have to be risky if done correctly.Investing can be risky if you have too much money in the stock market or in a single company, exposing your entire portfolio to drops.
If you want to protect your retirement savings from market downturns, it’s critical that your income strategy includes safe guaranteed retirement-income investments.Hire an investment professional to develop your financial strategy if you need assistance.
Getting retirement advice from family and friends
When it comes to retirement advice, many Americans turn to their family and friends first.
According to a survey conducted by the Employee Benefit Research Institute, 35% of workers say they seek retirement advice from family and friends.
Unfortunately, asking family and friends to map out a path to your golden years is akin to asking Aunt Edna for advice on how to treat your swollen gallbladder rather than a doctor.
Sure, you can count on family and friends to assist you in making one of the most important financial decisions of your life.However, you can do better.So seek professional advice or educate yourself properly.
If you need expert advice, use this free tool to find qualified financial advisers in your area in under five minutes.
Taking money out of your retirement account at the wrong time
Taking money out of your retirement account at the wrong time can cost you hundreds of thousands of dollars in retirement income.
So, what’s the best way to take money out of your retirement account? There’s no simple answer to that question.
Everyone’s best strategy for withdrawing money from their retirement accounts is different.Consult a retirement planning expert to assess your situation and devise a withdrawal strategy that is appropriate for you.
Take this quiz to see if you’re ready to retire.
It doesn’t have to be difficult to figure out when is the best time to retire.In five minutes, SmartAssets’ free quiz matches you with three fiduciary financial advisers in your area.SmartAsset has thoroughly vetted each adviser and requires them to act in your best interests.Take this quiz now if you’re ready to be matched with local advisers who can help you achieve your financial goals.
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