We have an announcement to make that you might want to key into right here, right now, especially if you’re interested in retiring something in the distant future: you might not be putting away enough for retirement. Doesn’t that just sound like the stuff of scary headlines everywhere in the finance world? Nobody wants to wake up and find that they really didn’t save enough for retirement. However, you will definitely want to make sure that all is well with your nest egg, because you might have more expenses than you think once you reach your retirement years.
You may even want to transition to retirement when you are over 60 (or earlier). In recent years this is happening more and more in countries like Australia where the retirement savings rate is higher.
Health care costs have been on the rise, and let’s face it — Medicare Plan B coverage isn’t going to cover everything. That means that you’re going to have to shell out for supplemental coverage, or you’re going to have to basically pay out of pocket for the things that Plan B doesn’t cover. Having Medicaid can help obviously, but the reality is that you have to be at poverty levels in order to receive assistance from this program.
Health isn’t the only area that costs a lot — your housing needs are important too. Your home might be fully paid off by then, but it also might not be paid off in full — especially if you have an outstanding HELOC or home equity loan on it. It’s essentially a second mortgage that can keep you from really enjoying the type of life that you’ve always wanted.
Defined benefit plans in the world of retirement have gone bye bye, leaving behind an uncertain retirement world. You have to make sure that you’re saving enough to also make up for inflation. Inflation is basically the concept of your money not being worth as much in the future. $1,000 today isn’t going to be $1,000 by the time you reach retirement age. So you want to make sure that your saving pattern and your investment pattern combine together to beat the overall rate of inflation.
In order to really crunch the numbers, you can find a wide variety of calculators online. All is not lost if you’ve found that the savings plan that you’re on just isn’t enough to allow you to stop working. You might just need to contribute more, or adjust into a more aggressive investment portfolio. If you’re willing to take on a little more risk now in order to grow your portfolio, feel free to do so. If you want assistance meeting these new retirement goals, then we strongly encourage you to get in touch with a good investment and finance advisor that can give you more specialized advice. Of course, make sure that they are fee-based — you don’t want anyone taking out a huge percentage from your portfolio’s value — that’s just money down the drain.
Now is the perfect time to really make sure that everything is right within your retirement world. After all, if you don’t think about it nobody else will!