Saturday, July 6, 2013

A Roadmap to your Retirement

 Does planning for your retirement seem like a daunting task?
That’s because it can be!
Would a roadmap to your retirement planning help?
Of course, if it is the right roadmap!

We all know we can use a roadmap, but if it’s not the right roadmap, to where we need to be then it is not going to get us to our desired destination.
It’s the same when it comes to our retirement, if you don’t have the right retirement map, you are not going to have the retirement you dreamed of.
So now you may be asking yourself, what should MY retirement roadmap look like?         
Here are a few essential guide lines for avoiding any wrong turns!

The number one thing to remember is you need to change road.
The types of investments that have served you well through your working years may not be suitable for you heading into your retirement years.  You now need investments that will give you wealth preservation and income rather than growth and income. Taking too much risk in your retirement years can be devastating and you may not be able to recover.

Remember the journey may be long.
We cannot forget about longevity, this is a huge concern for retirees nowadays.  Did you know that if you are in decent health by age 65 you can probably expect that your money is going to have to last you for about 25 years. Statistics show us that living to age ninety is very realistic nowadays!

Watch out for bumps on the road.
 Unplanned healthcare costs can have devastating effects on your retirement plan.  Even planned healthcare is a financial challenge on your retirement plans, as studies show that the average 65 year old couple need around $283,000 for medical expenses in their retirement AND that’s before even taking into consideration  EVEN needing long term care.

Be aware of any unseen obstacles that may in the road.
Something that can be so easily overlooked in your retirement years is inflation.  Why?  Well most likely throughout your working years your wages have risen as the cost of services and goods have risen, so you have never really had to think about it too much. But in retirement when it comes to living of your savings if you haven’t planned for it, inflation can literally ROB you of your income.
Look out for changes in the road ahead.
Taxes most people are expecting this change to be a positive one.  But this is not necessarily the case.  You see to maintain the same standard of living (as I am sure you desire) you need to maintain the same income.  But what we often forget is that we also no longer have those deductions that we once had, like kids, mortgage etc. This usually then leads to your tax bill going up rather than down.  So you need to find other ways to now be more tax efficient to protect your nest egg.

Lastly don’t forget to look out for others along the road.
And to do this you must not forget the importance of Estate Planning within your retirement plan.  By doing this you are ensuring your assets go where you want to them to.  Making sure that your loved ones avoid probate and having to pay any unnecessary taxes that may occur when you pass on.



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