We all have had days when the alarm has gone off for work and we have pushed the snooze button and wished that we were one of the lucky ones who were born into money and never needed to work a day in our life. Or, perhaps, you instead bounce out of bed each morning because you enjoy the work that you do and relish every ounce of sweat that has gone into making your career, enjoying the satisfaction that you made your career. No matter what category you fall into, both types of people can probably say that they are looking forward to retirement. We all look forward to days spent doing the things that we love to do, whether that be living up life and traveling the country, and maybe even the world, or slowing down and living a quiet life. Regardless, how you plan to spend your retirement, you must start saving for retirement now and making the necessary investments that will help make your retirement goals a reality.
Unfortunately, when many are thinking about retirement, they are dreaming about the luxury of retirement, but are doing very little to make their dreams a reality. Having the type of retirement you expect and living stress-free involves strategic financial planning through savings plans and such long-term investments as life insurance and annuities. Most who are not setting themselves up for a successful financial future are making one of these 7 mistakes.
Having No Goal
Most would agree with you that, trying to achieve anything without a specific goal in mind will get you nowhere, let alone near your goal. But those who believe this often do not make the same connection when saving for retirement. If you want to successfully save for retirement, you cannot just hope it works out. You need to know how much you will need, i.e. what kind of lifestyle you will want during retirement, and have a plan for saving that amount. An average percentage to save for retirement is 70 percent, but if you wish to maintain the lifestyle that you have or do such things as travel the world, you need to save 100 percent of more of your current living expenses. Once you know how much you will need, you can make a plan that involves saving from your current paycheck and investigating in how annuities and other long-term investments can increase your current financial holdings to your advantage.
It seems that everyone is rushing from one thing to the next, living a busy life that affords little time for more than the necessary daily priorities. We understand. It’s easy to put off making a strategic plan for a comfortable retirement, because it is not the most pressing need at this very moment, but procrastinating saving for retirement and learning about ways to utilize your financials to reach your retirement goals is a huge and many times catastrophic mistake that many make. You must right now, no matter your age – whether you have just started your first job or you are nearing retirement – have a plan in place. Though it is understandable that you would prioritize paying off debt or waiting for a promotion to start thinking about saving for retirement, you simply can’t. Saving for retirement must be an additional and top priority.
Having Overwhelming Home Costs
Having to pay a mortgage or make payments on a home equity loan during retirement is not a bad thing, but this financial responsibility can become a bad thing if you can barely make your payments on these loans while you are currently employed. If you find yourself burdened by overwhelming debt, all is not lost. You can get out of debt, even if you are approaching retirement. The best way to make a successful and strategic plan is to contact a financial advisor who can guide you towards achieving your short-term and long-term financial goals. Also, an annuity can be a profitable option for paying off a mortgage while you are enjoying retirement. Annuities offer opportunities to save money and increase your investment with more or less risk.
Being Unaware of Your Retirement Benefits
Many employers offer to match the amount that their employees decide to put into their retirement plan. Your employer is essentially rewarding you for making a wise financial decision. In many cases, you have to sign up for “matching” and sometimes wait to become eligible. Find out right away if your employer will match the percentage you are saving; if you don’t, you are literally missing out on free money. Regardless if your employer offers matching benefits, become educated as to how your 401(k), IRA, or other retirement savings plan works and utilize it to your best advantage. You may find that there are better investment options out there, including life insurance and annuities; often you have more options for utilizing your savings plans that will ultimately give you a greater profit.
Choosing the Wrong Tax Strategy
No matter your saving plan, you will eventually have to pay taxes on your investments. You many have to pay taxes now, categorized as post-tax contributions or paying later, pre-tax contributions. Knowing what your retirement strategy requires as far as when you have to pay taxes will inform the rest of your decisions. Many suggest that you invest in both post- and pre-tax contributions for your retirement savings. As you look into the benefits of your retirement savings plan, find out when taxes will be paid and if you will have to pay all your taxes when you retire, consider another plan of action.
Neglecting to Consolidate Your Accounts
Do you know where all your retirement accounts are located? If your career leads you to work with several employers, chances are that you have several retirement accounts. When you leave one employer, it is best to essentially “pack up” your 401(k) or other means of savings with your desk. Too many people forget about money that they have saved and actually lose money because they forget about their retirement savings that they have with multiple companies. If you find yourself in this position, recollect where all your means of retirement savings are and “roll” or consolidate all of your savings together. The best plan of action is to contact a financial advisor and discuss the options you have that would best profit you.
Putting Others Before Your Savings Plan
Many financial advisors see the results of clients putting the financial needs of their children or grandchildren ahead of their own retirement savings, by paying for college tuition or rent. Though it can be a tricky situation to navigate, you must remember that your retirement savings is important and that putting that off can be catastrophic. Find the balance between providing for your kids and helping them become self-sufficient and investing in your equally as important future.
You can have financial freedom that leads to a retirement that has the lifestyle that you want. It is within your grasp and we at Naples Life Insurance and Annuity Advisors would like to help. We offer annuities and life insurance products that can greatly aid in your retirement savings strategy. No matter your age, if you live in Naples and are ready to make a successful retirement strategy contact us!