Every day you’re reminded over and over again “Don’t delay! Prepare for your retirement today!” Naturally, you’re probably thinking, “I have plenty of time to think about my retirement later on”. And, without skipping a beat, you go about your day. Does this sound familiar? If so, you’re going to want to read this!
The real truth is that it is never too early to prepare for your retirement. Again, you’ve probably heard this over and over again. But, there is a reason for it – because it’s true! There is really no perfect age for anyone to start saving for retirement. But, I always recommend, especially in today’s economy, the earlier the better.
I’ve been helping couples, families and individuals prepare and live for a worry-free retirement for years, and I’ve seen many ideologies and mindsets when discussing retirement goals. Here is my list of the top five fallacies of the unprepared pre-retiree:
1. I’m good, I have a 401(k): With the unlimited resources available when it comes to gathering information, it still perplexes me as to how and why people believe that the only retirement vehicle they need is a 401(k). While I won’t argue that a 401(k) is a great starting point and should be at the top of your list, it shouldn’t be considered your saving grace to living a worry-free retiremen.
2. Healthy Today, Healthy Forever: I think at some point or another we’ve all taken our health for granted. At any given moment, though, that could change. As humans we’re not invincible. According to Genworth Financial, 7 out of 10 Americans over the age of 65 will need Long-Term Care at some point in their lifetime. Properly preparing for this can save your family money and headache in the future.
3. My savings will be my Income: Your savings account will always be considered a good thing – no matter what stage of life you’re in. However, unless you have a very large savings account (very, very large) it’s unwise to rely solely on that to fund your retirement. How will you generate income after you have retired? Will you also plan to significantly change your lifestyle to account for these changes in income? These are all things to consider.
4. Uncle Sam has my back: Yes, I’m talking about Social Security. No, Uncle Same does not have your back. And, unfortunately, will not likely have the younger generations back in the future. Relying solely on your Social Security, and as I said above, your savings, will not allow you to live the worry-free retirement you so deserve.
5. When I’m old, I won’t need a lot of money: Many people believe this to be true because they’re planning to downsize their house or change their lifestyle drastically once they reach retirement. But what we all know is that “life happens” when you least expect it. You can never assume that you won’t need money for unexpected occurrences.
You may already be retired, you may be preparing for your retirement or you might just be starting your retirement journey at a young age. Whatever your situation may be, I want you to keep these top five fallacies in mind the next time you’re sitting down to think about your retirement.
As always, I’m here for any questions you may have!