Here are some common missteps you can avoid to help achieve the retirement you are dreaming about:
Not cushioning with cash
You should typically have 3-6 months of income in cash—safe, easily liquid investments so that you don’t have to dip into your other investments when an emergency pops up. The penalties for early withdrawals and taxes can really derail you from your goals.
Not starting early enough.
Don’t make the mistake of continuing to ‘plan to do it in the future’ when it comes to saving for retirement. Start now with any amount you can.
Miscalculating your retirement downsizing
Many of us may plan on significantly reducing our expenses in retirement and then only plan for this smaller budget. But many early retirees find they are spending the same amount in retirement and then don’t have enough savings to support their budget.
Being blindsided by medical expenses
A 65-year old couple retiring in 2019 can expect to spend $285,000 in health care and medical expenses throughout retirement, according to Fidelity’s annual Retiree Health Care Cost Estimate. 1Don’t forget to plan for these out-of-pocket medical expenses you will likely face.
You should have a comprehensive, carefully-crafted retirement savings plan to guide you and to spot check if you are on track.
Work with one of our financial advisors to give you clarity in how your plan is looking and what modifications may be necessary.