Retirement Planning Mistakes

1. When Should You Start Planning Your Retirement

Even if you aren’t eligible for Social Security disability or retirement benefits, it is a good idea to start planning your retirement if you plan on leaving the workforce. Even for those over 50, a savings strategy is necessary that we can continue to build on even after retirement. While some people have both a traditional savings account and a 401 (k), others have only a 401 (i) with investments in stocks, bonds and real estate. No matter how you approach your savings plan, it is important to make sure you have enough time each month to save for your post retirement goals.

Residents of Illinois have been encouraged to plan for retirement at least five to ten years before you retire. This will give you enough time to plan your retirement and build your wealth. You may not be prepared for the future if you wait too long to plan. It’s best to begin planning as soon as possible, as life tends not to follow a predictable pattern for decades. To determine how much money you will need to retire, you can use a retirement calculator.

As you plan ahead, calculate how much money you will need to live comfortably over the next ten years using a retirement calculator. Next, decide how many assets you want to keep, such as bonds and stocks. After you have determined how much money you want to put into retirement, calculate how much each month you will need for expenses. These figures will allow you to budget for your retirement lifestyle.These expenses could include home mortgage payments, investments, health insurance and home bills like power and gas. Divide the monthly income and expenses by six to calculate these expenses. This should give you an idea of how much money your retirement will cost.

Be realistic in your retirement planning. Consider how much you will actually earn once you retire.  Consider any spending that you may have including any type of bills, groceries, electricity etc. The government offers a retirement account that can help you achieve your post-retirement goals. Some people withdraw money from an IRA to buy homes or pay down credit card debts. You may be able manage a smaller IRA if you don’t have a large retirement fund. Consider the tax benefits of saving in an IRA. Some retirement plans offer more options for retirement planning than others.

No matter if you have a Roth IRA or a traditional IRA, a solid retirement savings plan should be part of your overall retirement strategy. Each type of IRA offers many investment options and each has its own tax advantages. You can find great advice from financial professionals, books and websites to help you decide which IRA is right for you.

All in all it’s never too early to start planning your retirement, but it can be to late so early is the bird with this one.  You may be waiting for that next promotion or the next big break, but retirement is a lifestyle, not an age so do not procrastinate in planning for this phase of life.

2. Retirement Mistakes

Don’t be too conservative in your investment decisions.  It is important to realize that stocks will protect your portfolio against inflation. Your purchasing power will be diminished if your investment returns less than 3% over time. This investment usually consists of cash and bonds. This question will ask you: How much of my retirement portfolio should I invest in bonds to lessen the negative effects that I would face if I had a stock portfolio with a 100 percent share price?

Don’t spend too much to early.  Ready to take on your dream and travel the world?  It might be plausible, but make sure to compare your spending with other income streams and the portfolio before you make reservations. It is possible to live to 95, but it will be difficult to make ends meet if you run out of money at 85.

Keep track of your expenses for a minimum of two years before you retire. Here’s a simple explanation: Income from Portfolio + Social Security/Pension income – Expenses = Impact to the Portfolio. We are only working with a poor expense projection that could really increase the “hurt” in a down market.

Avoid unnecessary taxes. The conventional wisdom is to draw retirement income first from your taxable accounts, then your IRAs and other qualified accounts. If your future Required Minimum Distributions will push you into a higher tax bracket at 70 1/2, and you are currently in a lower bracket, you may have an opportunity to reduce taxes by withdrawing from your IRAs in your 60s.

Be wary of investments that sound too good to be true.  Take annuities for example, “income for life” is the pitch. While they may be suitable for some, I believe that most clients would not buy annuities if all products were described to them as required by the regulators under the “Best Interest of the Client Rule”.

3. Boost Your Retirement Savings With These Tips

The Internet is a great resource for people all over the globe who are trying to protect their financial future. If you want to maximize your retirement income, the Internet can help you. Retirees can use the internet to supplement their social security or pension, and they can also access other retirement income streams like those offered by their employers. These are just some examples of how you can increase your retirement income or how to reduce your retirement living expenses.

You can find many retirement tips online. But the most important tip for retirement is to know your financial goals and not stop working. It will take planning and persistence to increase your income, but once your money starts coming in, it will be worthwhile. It’s true that money is constantly flowing out of your pockets at an alarming pace. Therefore, it’s important to have as much money in your bank account as you can when you reach retirement age. It is a good idea to have certificates of deposit and savings accounts you can access if you need them. You can prepare for your life after work by having several retirement options. This will also make it easier to manage your retirement.

Another important tip for retirement income is to invest in the future. It is important to learn how to increase your retirement income through investments if you have a retirement strategy. You should consult an investment professional before you attempt this. There are many reputable, knowledgeable, and experienced investment professionals that can help you increase your retirement income. These simple retirement tips will help you get the retirement you want.

You can also reach out to your local companies about payment plans and options for your monthly bills.  Many Illinois residents have reached out to Ameren Electric about saving on their monthly electric bills by comparing rates.

Ameren is an Illinois utility provider committed to helping you save and avoiding any outages as well. Upon looking you may find even more ways to save on monthly bills. And start adding a bit more to your retirement funds.  It may not seem like much, but a little here and a little there can really add up overtime. So if things are tight it’s important to plan every bill and know if you can save anything on the back end with comparable service.

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