What you're forgetting about retirement

Planning for your golden years is a big task with lots of moving parts, so don't let something important fall through the cracks.

By Credit.com Aug 7, 2014 11:27AM
This post comes from AJ Smith at partner site Credit.com.

Credit.com on MSN MoneyPlanning for retirement can be tricky and you may feel unprepared for planning your financial future. Researching and understanding the retirement process and even using a retirement calculator can be great places to start.

A bird nest full of money © David R. Frazier Photolibrary, Inc., AlamyThough retirement may seem far away, the financial decisions you make now can affect how long it takes you to reach your goal. Retiring the way you want requires planning, budgeting and follow-through. But even those who plan carefully can forget to take into account some important factors that could lead to costly mistakes.

1. Family needs

While you may hope that your children and grandchildren will be hard workers and great savers like you try to be, periods of economic recession can leave young adults looking to their parents for help.

If you want to help out in this type of situation, it’s important to have some padding in your retirement plan. Consider establishing a specialized trust account for family members, a 529, UTMA or UGMA plan for each of your grandchildren, or even a gift account where you can make payments to family members as you see fit.

2. Taxes

When you contribute to a traditional IRA or 401k retirement plan, you get quite a significant tax break at the time. All of your contributions are made pretax, meaning they are taken from your paycheck before being taxed by the government. This lowers your taxable income as well, saving you more money. But remember, if you choose to cash out early, you are penalized quite heavily (10%) and the pretax contributions you made are taxed as you withdraw them. It’s a good idea to research the best ways for you to save for retirement for your particular situation.

3. Housing and medical costs

The need to plan for housing in retirement goes beyond having a home -- there are unique and numerous options for living while you age. Being less mobile or having increased needs can make housing more expensive as you may need specialized accommodations or access to assistance. It may seem obvious, but declining health can be expensive. Life in retirement can include major surgeries and lifestyle adjustments, so don’t let health care hold you back from experiencing the retirement you want.

4. Life expectancy

While it is difficult to predict how many years you should be saving for while you are in your 20s, 30s, 40s and even beyond, you should consider your family history and society's recent longer life expectancy. For a safe withdrawal rate, it’s important to save up enough so you can use a comfortable amount per year and still not run out of money. As a rule of thumb, you should be prepared for the maximum number of years you could reach

No matter what age or stage you're at in your life, it is always a good idea to save early and often. By investing wisely in your own retirement can help ensure that you can afford everything you need, and even some things you may have forgotten to account for.

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Aug 7, 2014 1:29PM
The question of taxes is not the taxes associated with an IRA or 401k but how many other peoples lifestyle will you have to pay for.  Now that housing, food, income, health insurance, education, etc. are paid for by taxpayers for a significant portion of the population, what is next?
Aug 7, 2014 2:03PM

Minimize, Downsize, you will be better off and able to enjoy your life. Way too much crap in our lives' to conquer toys, glamour, and hype. Having a ball at 69 and all on 3k a month, bicycle (no car) bus, studio apartment, no cable, have I phone, travel.

Aug 7, 2014 2:13PM
You forgot that your retirement wealth is being handed out like candy by the government leaving you to retire in a box under the bridge. At least you will get that water front property you always wanted.
Aug 7, 2014 1:39PM
Then the Fed is give our money to the banks at zero interest and the are in record debt of over $4trillion. The give away will due this country in just like other countries Geece is one of them with %25 unemployment.
Aug 7, 2014 4:48PM
The best chance to retire on your terms is to start planning and saving/investing early in life, do it with every paycheck and take advantage of any opportunity to increase your nest egg (employer matching plans, catch up contributions when you reach 50,etc.). While this may be difficult for some, many others don't think or prepare for retirement until they are almost there. I use several sites for retirement information including the site Retirement And Good Living which provides information on investing, planning, downsizing, frugal living. retirement locations and many other retirement topics that can help those who are planning for retirement or are already retired.

Aug 8, 2014 7:28AM
To RUstpd222: for your info there are a lot of democrats living high off the hog too which we all pay for. Just remember that it's the democrats who have given our hard earned money to those who choose not to work for it. I believe in helping truly needy folks,  but give me a break - there are lots of slackers out there. Once they get a taste of the dem's handouts, they roll over like puppies and vote the party line. "Why work for money when I can get it free" and all the other perks like free phones, medical coverage, food stamps etc. Billions and billions are being paid out unnecessarily and I don't see any effort to investigate the fraud. That's what you voted for! 
Aug 7, 2014 6:24PM
Solution: 1) Don't have a family!  They cost too much based on what little income a person can earn these days working a full time job.  That eliminates any need to provide for children that are too ignorant or unfortunate to pay for themselves.  2) Don't earn any more money than you need to barely get by and you won't pay much in taxes.  That takes care of the tax problem.  3) You don't know how long you been here after you die so why worry about how long you going to live?  Live for today, not for tomorrow!  That takes care of life expectancy.  4) Housing and Medical costs?  Pay you home off as fast as possible so the payments don't become an albotross around you neck in retirement.  As for medical, you gotta ask your self, why enrich the lives of others just so you can live a few years longer?  The universe has been here for billions of years!  You might live to be one hundred if you are lucky.  It's still just a blink of the eye in terms of all that sourrounds you!  Given item 3 above, you won't know how long you lived after you are gone anyway so forget about medical costs!  If you die, you die!  Problems solved!   
Aug 7, 2014 2:41PM

Financial servitude is the American way of life.

I God I Trust, who else is there?

Aug 18, 2014 9:07PM
best retirement plan is to either never get divorced or never get married.

Aug 7, 2014 5:08PM
The purpose of VAT tax they want is to get their hands on our Roth tax free money.
Aug 7, 2014 5:05PM
Hey carlytx . . . good afternoon from a fellow Southerner (AL).
Retirement-planning is easy.  Just do what I did.
Save up all your money from being in the service,  being a stripper, being in a band, a roofer, a cop, owning a construction business and invest it in real-estate (19 homes) and you'll have an 8-figure nest egg in no time.
Do you wanna know more about me? . . . I'll bet you do !
Aug 7, 2014 4:28PM
I despise pretentiousness . . . Bwhahahahahaha . . . I cracked myself up with my own hypocrisy !!
Aug 7, 2014 3:11PM
Well I'm possibly God's personal favorite then, cause I got it pretty good! 
It must be karma since I'm so Fabuloso !
Aug 7, 2014 1:58PM
Reason for being broke:  All the worthless republicans not doing anything to improve the economy, create jobs or do any work at all in their high paid jobs, which we all pay for. Plain & simple.
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