April 11, 2017
Four Critical Retirement Planning Mistakes
Many people avoid retirement planning just like they avoid estate planning. They do not want to consider what the future might hold because they do not want to think about negative possibilities. However, retirement planning is more about ensuring that you have the funds available when you retire to enjoy the lifestyle you desire for your retirement years. Retirement planning allows you to set goals to give yourself the quality of life you want for yourself and your spouse in your golden years.
However, many people make critical mistakes that can derail their retirement plans. Below are four mistakes you should avoid when planning for your retirement.
Retirement Planning Mistake Number 1: Thinking You Have Plenty of Time
Thinking yo have plenty of time is the biggest mistake you can make when planning for your future is to assume you have more time. The key to having sufficient savings for retirement is to begin as early as possible. A key element of retirement planning is to estimate how much money you will need at retirement age to continue the standard of living you desire.
If you begin saving early, the money you place in your retirement accounts has longer to compound interest. Therefore, even small amounts can earn hundreds of thousands of dollars before retirement. As your income increases, you increase your retirement contributions to increase the amount you have available when you retire.
Retirement Planning Mistake Number 2: Failing to Plan for Health Care Costs
An essential element of retirement planning is to plan for the increase in health care costs in the future. Even if you have great health insurance now and you are in good health, you do not know what the future holds. As we increase in age, our risk of developing health issues also increases. In addition, the cost of health care increases each year.
Therefore, while your health care costs may be low now, you could face high medical expenses during your retirement. Relying on Medicaid or Medicare is not a wise choice. Including health care planning in your retirement plan is in your best interest.
Retirement Planning Mistake Number 3: Failing to Plan for Long-Term Care
Long-term care is extremely experience. The cost of assisted living or nursing home care can reach into the hundreds of thousands of dollars during a lifetime. The cost of long-term care can quickly exhaust retirement savings and other assets. Furthermore, you do not want your loved ones to be forced to bear the burden of this cost nor do you want the assets you intend to leave to your loved ones sold to pay for long-term care.
Therefore, nursing home planning or Medicaid planning is another essential element of retirement planning. By taking into consideration the need for long-term care, you can protect your retirement savings and other assets when the time comes for long term care.
Retirement Planning Mistake Number 4: Failing to Update Your Retirement Plan
It is extremely important for you to review your retirement plan every year to make necessary adjustments based on your needs and goals. As with an estate plan, life events can alter your goals and needs for retirement. Furthermore, changes in the market will affect your investments. You may need to adjust your retirement savings. In addition, you may need to adjust your retirement savings goals to be in line with the cost of living increases that change each year.
Call The Elder Care Firm of Christopher J. Berry, CELA For More Information
If you are ready to tackle retirement planning, we are here to help you. Our retirement planning attorneys can offer guidance, support, and advice about the diverse options available, including IRAs, pension plans, 401k, trusts, estate plans, life insurance policies, stocks, bonds, and other financial instruments.
Contact our office by calling 888-390-4360 or use our online contact form to request more information or schedule an appointment. Our retirement planning attorneys assist clients throughout Livingston, Oakland, Washtenaw, and Wayne Counties.