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Why You’re Not Prepared for Retirement: Research

Forbes: Why You Might Not Be as Prepared for Retirement as You Think Click Here

Are you worried about retirement? If so, you’re not alone. According to our research, only 22% of employees reported being on track last year and the actual state of retirement preparedness may even be worse. That’s because many people use retirement calculators to estimate whether they’re on track, but even the best calculator is subject to the universal rule of computer programs – garbage in, garbage out.

Here are some of the most common mistakes I see people make when it comes to calculating whether they’re on track …

  1. Not personalizing retirement spending needs
  2. Trusting your Social Security statement
  3. Counting on a pension that might not be there
  4. Relying on working in retirement
  5. Assuming an average life expectancy
  6. Planning to retire at 65.
  7. Overestimating investment returns
  8. Confusing investment returns with income

The Motley Fool: 3 Signs You’re Not Ready for Retirement Click Here

You may be mentally and emotionally ready to retire, but if you’re not financially ready, your retirement may not be the relaxing time you’d hoped for. Being truly ready to retire means having a thorough grasp of how much money you need and the savings to back it up. Here are three signs that you’re not quite there yet.

1.      You don’t have a retirement plan

2.      You have a lot of debt

3.      You don’t know when you should take Social Security

Medium: Why 78% of Americans Are Not Prepared for Retirement Click Here

Many Americans have very little saved for the retirement. The 2018 Planning & Progress Study gathered data in an online survey from over 2000 Americans over the age of 18. In that survey, 78 percent of respondents said they were “extremely” or “somewhat” concerned about affording a comfortable retirement and nearly 66 percent said there was some likelihood of outliving retirement savings.

Additionally, the report found that, * 21 percent of Americans have no retirement savings at all, * 33 percent of baby boomers have between $0 and $25,000 of retirement savings, * 75 percent of Americans reported a lack of confidence in receiving Social Security benefits, and * 46 percent admitted to taking no steps to prepare for the likelihood they could outlive their retirement.

There are a number of reasons that Americans are not prioritizing retirement planning. From not having finances organized to daily budgetary constraints, there is always a reason to put off retirement planning. A recent phenomenon known as “The Sandwich Generation”, where adults age 40 through 50 are caring for children and aging parents, has caused an immense financial strain. In fact, 15 percent of people between the ages of 40 and 50 are financially supporting aging parents and their children, making retirement planning extremely difficult.

However, retirement planning is essential for a financially secure future and not being financially prepared can have dire consequences. Aside from being living comfortably in retirement, not planning for retirement puts a strain on government resources.

The Balance: Tips to Prepare for Retirement Success Click Here

The retirement planning process takes time and effort. At times it may seem like an overwhelming task. But what you do today can help you achieve your retirement goals and allow you to maintain the lifestyle you want in your later years.

Here are some tips to make reaching those retirement goals feel a little more manageable.

Tip 1: Focus on the things you can do and decide to take action today

  • Create a plan and put it in writing
  • Implement your plan
  • Track your progress

Tip 2: Protect yourself and your loved ones

  • Your life
  • Your health
  • Your assets

Tip 3: Take a look at all of your retirement saving options

  • Employer-sponsored retirement plans (401k, 403b, etc).
  • Check out IRAs
  • Consider HSAs.

Tip 4: Focus on your overall financial well-being

  • Increase your knowledge
  • Increase your income
  • Find ways to reduce your spending
  • Refinance and consolidate debts
  • Eliminate extra fees and charges.
  • Search for ways to reduce your taxes

MarketWatch: The 7 Elements of a Successful Retirement Click Here

  1. Start with well-defined goals, and revisit them at least annually.
  2. Many people get great satisfaction from work
  3. Another aspect of retirement is lifetime learning
  4. Budgeting is more than setting a top-line spending number based on a pre-arranged percentage
  5. Let’s consider income
  6. Take the time to go through your employment history and discover what benefits you may have forgotten
  7. Invest for your whole life

Kiplinger: If You Want to Retire Comfortably, It Isn’t all About Investing Click Here

A lot of people — maybe even most people — can be successful DIYers through the early years of their investing life. Unless you’re a high earner, have a high net worth or have some other special planning needs, you probably can figure out how much you want to contribute and how to allocate your assets. (If you can’t or don’t want to, you should, by all means, seek professional guidance — even if it’s only on specific occasions, or to tap into some good investing advice.) 

However, I’m going to warn you: When you’re ready to wrap up the accumulation phase and move on to preservation and distribution, things could get a little trickier. OK, a lot trickier. Using a DIY approach may not be the best choice as the focus shifts from making and saving as much money as you can to living off that money for decades in retirement. 

You need a comprehensive financial plan that includes …

  1. A solid income plan
  2. An investment plan
  3. A tax-efficient plan
  4. A healthcare plan
  5. A legacy plan

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Ryan Keapproth

Ryan Keapproth

Retirement Planner

Ryan is dedicated to serving clients to achieve their retirement goals. Ryan’s holistic approach centers on wealth management strategies with a focus on income planning throughout retirement. As a Financial Advisor, Ryan is an Investment Adviser Representative (IAR), life and health insurance licensed and a Certified Tax Preparer. Ryan is a graduate of the University of Minnesota, with an Accounting and Finance major.

Ryan is a lifelong Minnesotan originally from Woodbury and currently residing in Bloomington with his wife, Riamae, and their rescue Terrier Beagle mix, Douglas. He and his family are avid travelers in their free time. Ryan enjoys playing golf and poker, and describes himself as a major foodie enjoying new restaurants around the cities whenever possible. He is a sports fan especially when the Vikings and Timberwolves are playing.