Retirement Planning Advice
Retirement planning advice is not always welcome, especially when it is advice that will have an adverse affect on retirement income. There is a lot of confusing and conflicting information out there concerning what is good advice and what is bad advice. If you are at a point in your life where you are beginning to look at what you want to accomplish in retirement then you need to know what to expect. One of the most important questions to ask yourself is, “what type of lifestyle do I want to live?” There are different levels of living, and if you choose the wrong level of living, your income will suffer.
It is not uncommon for older people to become frustrated when receiving Retirement Planning advice from financial advisors. The financial advisors may put you in a situation that you have no business being in. They may recommend a 401k with an extremely low ROI (return on investment) that you can ill afford, but this retirement savings account has no room for any additional expenses once you retire.
This is just one example of retirement planning advice that is bad advice. Other examples include using your retirement savings to buy expensive items such as cars or homes instead of having a life insurance benefit that would go to your family upon your death. In fact, once you retire, and you have some of the larger debts, the last thing you want to do is to incur more debt just to keep your current lifestyle.
Retirement Planning Advice That is Bad Advice
Another example of retirement planning advice that is bad advice is to start investing early in your career. Most people in their golden years wait until they are sixty to start saving. The average retirement age is around fifties. If you were to start investing early and save at that age, you would probably retire at fifty or sixty and still have a nice nest egg left to enjoy your retirement years. Retirees who wait until retirement age are usually left holding the bag, carrying a retirement plan that is not designed to accommodate larger deposits and growing payouts.
Another retirement planning advice that is bad advice is to never start taking accounts other than the traditional two or three account types. The reasoning behind this retirement planning advice is that you will never know what type of money you will require in the future, so it makes better sense to put all of your eggs in one basket and avoid having to dip into it. What many people don’t realize is that having multiple investment types will allow you to hedge your bets and get additional returns by putting some of your fixed income into accounts such as the traditional IRA. You can also diversify by owning stock accounts and bonds, CDs, and even mutual funds.
One final retirement planning advice that is bad advice is to get joint accounts set up with your spouse or another beneficiary. Often times, one spouse may be more financially stable than the other, especially if there are children involved. Having assets split between two people, allows each person to build long-term income from their own funds. Unfortunately, most couples do not accomplish this because they don’t take the time to explain to their guests about how the retirement planning advice they are giving applies to the other’s situation.