Residents of Denver are fortunate to be living in a relatively thriving, healthy economy where there are abundant jobs. These conditions make it an ideal time to save for retirement and make sure you have a plan in place for your retirement income. Many people in 2017 are taking advantage of the lower unemployment and better salaries to think about retirement, but some residents are making significant mistakes. Could you be one of them? No matter where you’re located in the country, you might be able to relate to one of these common mistakes in retirement income planning.
1. You don’t plan for your retirement income at all
Failing to plan is planning to fail, as the old saying goes. When you’re 65 and have nothing for your retirement, you will look back and wish that you have taken a harder look at the options that were available to you during your working years. If you’re younger than 65 and reading this article, don’t let yourself put off the thought any longer. Plan for your retirement now and save yourself from poverty and regret later.
2. You trust that Social Security will take care of your expenses
We covered this more in depth in another blog, but if you’re counting on Social Security to take care of your living expenses, you’re in for a rude awakening. Unless you have some other safety net in place, relying on Social Security alone to provide your income in retirement is not sustainable for most people.
3. You simply put your money into a savings account
Maybe your employer doesn’t offer a 401k, or maybe you just have never taken the trouble to enroll, or maybe you don’t trust that a 401k is the best option for you, or maybe you don’t know that there are other options outside of a 401k for your retirement. Whatever the reason, you simply put your money for retirement into a savings account. This is a bad idea for several reasons.
One is that you can easily pull it out. Your transmission goes out, your kid gets sick, or a tantalizing opportunity to purchase a business comes along, and you take part or all of your retirement nest egg out of savings, planning to replace it as soon as possible. That might be never. It’s easy to put a higher priority on the immediate need, but once you get to retirement age, it’s a safe bet that you’ll look back and realize that it wasn’t as high a priority as the dilemma you might be facing then of depending on the charity of others and being one step away from being homeless and starving.
Another reason that a savings account is a bad idea is that the interest rate is so low, causing you to miss out on income that you could have had. A typical savings account in 2017 offers 0.01% interest, and even the very best savings accounts are around 1.25% interest, all of which are far lower than what your money could have made with compound interest when it was invested by a skilled financial advisor.
Don’t make these mistakes. Get solid financial advice from the retirement income planning experts at Income for Live, and make sure that when you retire, you can stay retired. Contact us today to get started.