When it comes to planning for retirement, many people feel out of control these days, due to the volatility of the job market, the stock market and the world economy. A Consumer Reports column last week, however, reminds us of what we can control by detailing seven common ways people can wreck their retirement:
Having no plan. At the very least, you need to have a guesstimate of how much money you will need to save for retirement, an annual plan on how you will save and/or invest to get there and exactly what kind of lifestyle you want to have when you retire.
Having no Plan B. In today’s job market, we are no longer totally in control of when we retire – an employer may make that decision for us. Having alternate plans that consider different scenarios is a must.
Not knowing what you have. You need to take an inventory of all your savings and investments so you can establish a solid baseline for moving forward.
Underfunding retirement accounts. Especially for those whose employers match contributions, you are leaving money on the table if you don’t contribute the maximum amounts to your tax-deferred plans.
Not taking a calculated risk. Being overly cautious with investments once you retire means you will likely lose ground financially.
Forgetting fees. Scrutinize the fees administrators are charging you for managing your 401(k) and other investments. It should be easier this year, since new disclosure rules increase transparency.
Counting on home equity. These days, it is advisable not to count home equity in your net worth unless you are certain of how much profit you can earn by selling your home. Instead, view your home equity as insurance in case other retirement projections don’t work as planned.
Taking time now to plan for your financial future is probably one of the best investments you can make for you and your heirs. Contact our California estate planning law firm to get started.
Contact us today for individualized planning strategies to meet your unique needs.