Will You Be Able to Sustain Your Current Lifestyle with Your Retirement Savings?
The average American knows little about saving for retirement and how much they’ll need to have socked away in a 401(k) or IRA before retiring. Although each person’s needs are different, everyone expects to live comfortably after leaving the workforce. But knowing just how much it will cost to achieve this goal can be difficult without the assistance of a financial advisor who is trained to come up with precise figures and provide investors with sound investment advice. If you’re not sure that your current savings will last you the remainder of your life, you may need to increase your contributions or postpone retirement so you have more time to save.
Postponing Retirement Gives You More Time to Save and Invest
If you’re healthy in your 60s and foresee working a few years past 65, you can significantly increase your retirement savings in a short amount of time. Postponing retirement also gives you the opportunity to change your lifestyle in a way that makes money more manageable. If you became used to living in a large home while raising your family but now it’s just you and your spouse, downsizing now may benefit your future. You’ll have less stuff to care for as you age, and you can cash out on that home equity to purchase a smaller home, which can decrease your cost of living once you’ve left the workplace.
Medical Emergencies Wipe Out Savings Quickly and Without Warning
Many retirees don’t account for the extra medical costs they’ll be responsible for once they’re no longer insured by their employer. One major illness or accident is all it takes to annihilate a lifetime of savings. Actively preparing for the medical portion of the retirement lifestyle is every bit as important as day-to-day costs of living, especially since your healthcare needs are likely to increase as you get older
Helping Others in Need May Cost You Comfort
If you’re a parent or a grandparent, you may find your child or grandchild in need financially. Experts agree that this is another way that retirees quickly spend through their savings. You may find yourself wanting to help a loved one in need, but it can be detrimental if you don’t have enough money saved. Make sure you’re really in a position to help without hurting your own financial future before you make any offers of financial assistance.
Investing in Your Future
Creating a diverse portfolio of investments using the money that you’ve saved for retirement may require the assistance of a certified financial planner. They can help you weigh the pros and cons of each type of investment. That way you’re able to grow the money that you’ve set aside for retirement substantially, while only taking on the amount of risk that makes sense for your situation. You can find financial planners both locally or online. Just check their reputation by looking at reviews in advance.
A Little Preparation Saves You Time and Money
Retire and live comfortably because of the money you saved and invested. You’ve got options that are easily sustainable. By considering how your money will be spent once you’ve left the workforce, you’re better able to anticipate how much you’ll need to retire on. Accounting for unforeseen financial challenges such as increased medical costs or the need to relocate to be closer to family helps you weather any monetary storm that comes your way.