An upsurge of the population is approaching retirement, and relatively few among them possess the level of financial savvy for optimal retirement planning. A financial planner can help guide retirees through difficult choices. By identifying and avoiding the mistakes that many retirees make, planners provide confidence and peace of mind for a stable retirement.
Have a Goal
Going into retirement planning without a goal is a significant mistake that can prove expensive. Retirees can find themselves living far outside a sustainable budget. For most, the goal is to establish a financially secure retirement. Planners can help determine the percentage of previous income that must be replaced for every year of retirement, and design a plan for working toward this goal.
Do Not Procrastinate
Starting earlier to set aside funds for retirement is better, but those who haven’t should start immediately. Financial considerations can be stressful, particularly when considering a long retirement, so putting off planning is all too easy. With the right advice, even a late start can be put to prompt and effective work.
Choose the Optimal Tax Strategy
Taxes apply to retirement savings, and the decision to make pre-tax contributions is a common mistake. A financial planner will guide clients away from choices like this which might seem immediately beneficial but will prove more costly down the road. Pre-tax contributions mean taxes are paid when the money is taken out: taxes paid on the contribution and the interest it has earned alike.
Retirement investing is confusing and complicated for those new to long-term financial considerations. Financial planners save retirees money and stress by avoiding these and other pitfalls, such as neglecting to update strategies, failing to consider health care costs, and not saving enough. With practiced advice, retirement planning is less stressful and yields more successful results.