1/23/2013 10:30 PM ET|
Retirement errors good savers make
It makes financial sense to put away as much as you can for later years, but don't let that focus keep you from enjoying your working years.
With so much data pointing out the inadequate savings levels of average Americans, it seems like almost everybody needs to save more for retirement. But it's also possible to take retirement saving too far and ruin your current quality of life in the process. Here are four mistakes that diligent retirement savers should strive to avoid:
Don't become obsessed with retirement guidelines. Many retirement savers are familiar with the 4% safe withdrawal rule. But it's important to remember that while aiming for a fixed number aids planning, you may need to adjust your strategy in retirement. Coming up with a fixed withdrawal percentage the day you retire and then religiously taking an inflation-adjusted amount each year no matter what happens in the markets is too rigid a strategy for most people to adhere to. In addition, a person who strictly adheres to the 4% rule will deem his or her portfolio as falling short whenever expenses exceed 4% of the portfolio balance. This can cause anxiety, even when the portfolio is likely still adequate for supporting the retiree's lifestyle.
Don't sacrifice too much now for tomorrow. While saving too little for retirement can lead to disaster in later years, many savers sacrifice too much today in hopes of a better tomorrow. Remember that today is also important, and take everything in moderation. After all, money is for spending, too.
Don't call it quits too early. If they sacrifice too much, many savers can come to feel burned out. They may end up retiring from their job too early and missing out on peak earning years that may also turn out to be their most satisfying years at work. Some people may even realize, years into retirement, that they need to get back into the game because they underestimated how much money a multidecade retirement requires. Even if finances aren't a problem, some retirees simply miss the social aspects of a work environment. Sure, it's hard to imagine right now, but can you guarantee that you won't miss work after 10 or 20 years or retirement?
Don't start thinking money is all you need after retirement. A healthy retirement is much more than having enough money to live on. Many savers spend far too much time planning and thinking about money. Through their working years, they sacrifice their health for a bit more money. They sacrifice their time and their relationships just to work a few more hours. Family, friends and hobbies are among the things that are as important as money for a comfortable retirement. Don't neglect other areas of your life as you strive to put more cash in the bank.
Most people definitely need to save more, so don't use the advice above an excuse for excessive spending. But if you take saving and planning too far, your retirement may not be all that rosy, either.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
The Article is a worthwhile read, for beginners; Thinking about Retirement...
That is lot more to the story, when you get down to R-Day and the nitty-gritty...
It really can be an enjoyable part of your life...It's how you handle it, and what you make of it.
Jeez Louise!! What a useless waste of cyberspace!!
Anyone with two brain cells gets this.
First....You have to prepare for retirement and WANT TO, Mentally..Give some thought to the change in life and other's in your family...Seek a little input from them and friends, others that are retired..
Secondly...Very important to have a Health Plan of sorts and have pretty good Health.
Third.....Pays to have Hobbies, or some Goals after working and a Network of friends, ex-coworkers.
Someone to identfy with, Even maybe partime or Hobby job. Remodeling home or changing things.
Fourth...Now that you have much of the Anguish, Stress and second thoughts out of the way...
Then you must tackle the Savings, money, retirement funds...How much will you need ?
Approximate costs; Then windfalls, income from Pensions,401s,Investments,Social Security, VA or even Estates from relatives etc..Attend any Retirement Seminars that you can....Read.
Fifth....Cutting cost'....It's beneficial to have a Mortage paid off if you have one, same with vechicles.
Any major balances on Credit cards or other Loans....No bills that you can't handle with the money you will be receiving..? YOU CAN live for less, when retiring...A lot of expenses go away..
Sometimes an extra vechicle ?....Work related expenses, commuting(all included expense) coffee lunch,dinner or other expenses, clothes/shoes, hair care, make-up, happy hours and any other work related cost'...Some say you need about 80% of your income..My guess about 65-70%, sometimes less...? All depends on your Lifestyle, Social life, hobbies,travel, Kids&Gkids, etc,etc.
Owning your own business, is a little different; Many work related cost are asorbed, working for others,,when retiring, most just go away.
You can find many ways to save money, insurances may drop, senior discounts on many items;
Cooking more meals and smarter shopping..Wiser travel and trips with vechicles, even on weekly demands..Do many things "one trip." Most people even eat much less when older?
Green energize your house for money savings, have at least one smaller vechicle.
Ask for "Senior Discounts" on anything available, even your electric or heating/cooling bills.
Savings, 401s,IRAs,Roths,Buyouts,Pensions,SS, or sold business all add up...Calculate your Retirement.
Don't know that you really have to draw down your savings by 4%...IMO it is better to try and let it grow more the "first few years" if possible?...It pays to get as much as possible all figured out?
Then just retire...
WHAT? WHO? OBAMA? PELOSI? BIDEN? KERRY? ALL THE RICH DEMOCRATS? HOLLYWEIRD WITH THEIR TAX BREAKS FROM
OBAMA? BIG UNIONS? ALL THE STIMULUS MONEY HE GAVE HIS FAMILY AND FRIENDS? NOT MIDDLE CLASS HE JUST RAISED
OUR TAXES AND LIED LIED LIED LIED LIED LIED LIED.....JUST LIKE BENGHAZI, FAST N FURIOUS, HEALTHCARE DEATH PANELS
AND FAKE GLOBAL WARMING TO PUSH FAILED GREEN AGENDA SO WE PAY HIGHER ENERGY AND FOOD PRICES! IT'S NOW
THE BIAS MEDIA DON'T EVEN CARE EVERYBODY KNOWS OBAMA IS A FAILED LIAR AND THEY COVER FOR HIM BUT NOW
THEY ARE HIS LIBERAL PROPAGANDA MACHINE! THIS IS NO DIFFERENT THAN A COMMUNIST COUNTRY! HEIL!
Saving too much?
Are you kidding?
Banks give nearly zero percent interest on savings. Food, gas, health care and real estate costs are sky-high, for those of us who pay for them.
Who has the luxury of saving too much these days?
A helpful article would be "How to Save Anything."
Saving too much. I am glad I saved too much. If I didn't I would not have been able to purchase all the foreclosures I did. Now I can retire at 55, and not worry about SS or MC. Just wish I started earlier. Also being a student of history helped. About every 50 years we get a depression, Should have happened earlier in the 1990's but was delayed until Congress changed the rules to be more like the 1920's, with things like buying on margins, So instead of stocks, it was homes, and the same thing happened again, People walked away, resulting in the crash. And like History the peole with cash made out like bandants, and increased their wealth, the people who didn't save became poorer.
since China owns the u.s AND Canada you better learn Chines
NO Matter how much you save all of your 4021k,your cd any savings you
have is soon to be taking over by the U.S Gov. look it up under G.W. Bush
HR 4049 Passed thats when gov. is going to take it ALL from you. so yeh
save all you can..it won't be yours soon. so long suckers.
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