Planning for your retirement is not something you should neglect. If you want to have a comfortable retirement, you should start planning as early as possible. People choose the assistance of a financial planner so that they know exactly if, and when they can retire. However, there are some mistakes that most people make when planning for their retirement. Here’s what you should avoid doing.
One of the first things you need to decide is how much income you need to maintain your current lifestyle when you retire. Most people don’t know, or they make inaccurate assumptions without taking into account inflation and other factors. If the amount you need to maintain your current lifestyle during your retirement is too much, it means you will have to make adjustments to your retirement plan. On average, you will need about 80% of your current annual income for your retirement. Most people have no clue of how much they will need for their retirement. Do not leave anything to chance, make accurate calculations of how much you will need to sustain your lifestyle during retirement.
Higher Healthcare Costs
Another area that is overlooked is the higher health care costs you will have to bear during your retirement years. When you are planning your retirement, you will need to add these costs to your plan. Overlooking healthcare costs could leave you strapped for cash when you need it the most.
Long-Term Care Plan
Caring for an elderly parent takes a toll on their loved one and their savings. The US Department of Health states, “About 70% of people aged 65 and above will require care at some point in their lives.” It is vital to take long-term care into consideration and include it in your retirement plan.
John Labunski is the founder of LWA Fund Advisors, LLC. He is also a former executive for such prestigious corporations as P&H and Goldman Sachs. Labunski and iconic radio personality Michelle Wright currently co-host the popular Wealth911.com talk radio program.