Failing to Plan for Retirement

We have all heard the old saying “people don’t plan to fail. They fail to plan”. I have a boss who seems to use this saying every other week, so just writing makes me roll my eyes to the back of my head. But like many sayings, the reason that they are still being used is that they are valid and are still applicable to our lives. Planning is important, especially when we are talking about retirement.

Katy Marquardt with Yahoo! Personal Finance wrote about six common steps people overlook for retirement:

  1. No plan. The statistics for people that are not saving for retirement are sadly high. What’s surprising is that the statistics for people not having a financial plan for retirement. Marquardt suggests starting by using financial calculators. If your employer offers investment-advice program use them. The financial institution where your investing your money, usually have a free checkup of your finances and even comprehensive looks into estate planning and asset allocation.
  2. Lowballing your life expectancy. We are living longer than ever. Expect to live 30 to 40 years after retirement. When you make your plan, make sure that it will cover this spread of time.
  3. Lowballing your expenses. Don’t think that because you are not working, or maintaining a full family that your spending is going to dropped. Chances are you will still spend about the same you did during your working years due to increases in healthcare and miscellaneous categories such as travel.
  4. Plan for the unexpected. What if your child moves back home, or you need major repairs in your home. Make sure to save a little bit extra to be prepared for life’s little curveballs. (Sounds like an emergency fund!.)
  5. Healthcare costs on the rise. As employers are moving away from offering retiree health benefits, and premium costs rise for retirees, not planning how to pay for the costs of healthcare can seriously make a dent in your nest egg.
  6. Inflation. Remember that inflation’s ugly little head is going to increase about 4 percent every year. This has to be included into the equation when looking for that magic amount need it to retire comfortably.

Next month, I am going to see a financial adviser to get a check up on my retirement plans. For whatever reason, I am somewhat nervous. It feels like a fearful visit to the doctor. One of the most important questions I have for him will be that of healthcare. I want to retire early, and I believe one of the biggest obstacles that will be in my way will be how to pay for healthcare for me and my spouse. I will write a post with my experience with the adviser. I’m also making a list of other questions to ask. Feel free to let me know what questions you think I will probably overlook.


1 comment so far

  1. Lee on

    Education is key. I really don’t think colleges/universities prepare people for long term wealth and financial planning. It’s imperative!

    The more you learn – the more you earn has becom increasingly true for me over the years…

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