When it comes to retirement, a main concern for many folks is determining just how much money we will need to live comfortably. Now, “comfortably” can have a totally different meaning depending on the person you ask, but in general, let’s assume its the basics such as water, food, shelter, etc.
According to a recent article by Maurie Backman from The Motley Fool, this is a very real issue that Americans are facing and there are three reasons for possible retirement miscalculations.
1. Although we can’t predict our future, we can certainly try to plan for it and to do so effectively, we must recognize that our needs will change as we get up there with age. For instance, maybe you typically do a lot of things around the house now such as yard work, minor home renovations, and the like, but what if our future medical conditions hinder these once doable activities? This is where one would account in their retirement budgeting for lawn maintenance, house repairs, etc. It is much better to be conservative in your planning, than not.
2. The boredom factor is a very real thing and what this means is simply that we don’t realize how much of our time and energy that work demands from us, day in and day out. The Motley Fool points out that this activity is not “forcing” us to spend money, minus the small commuting/incidental costs, and when retirement comes knocking on our door, we wont be in the hustle and bustle routine that once took up so much of our time. The result? Boredom. Now, while some may have an exact picture in their mind of what they would like to do, others do not, and this is where another budget planning tip comes in. The point here is that whether you want to golf or even travel in retirement, these activities cost a pretty penny and must be considered when planning for retirement.
3. Lastly, comes the “i” word. Inflation. Unfortunately for us, the dollar’s value does not stay the same over time and this means that what we are accustom to paying in this day and age, will not stay at that level in our future golden years. That is why it is wise to consider this factor as well in your retirement budget process and be as conservative as you can be.
To help in aiding your retirement picture, The Motley Fool recommends that if you happen to be age 50 or over, to make “catch-up” contributions to your retirement accounts such as an IRA or 401K and to also consider an annuity, which unlike the roller coaster stock market, would give you the peace of mind needed in the form of a guaranteed income for life.
Here at The Harrin Group in San Antonio, TX, we can help you secure your retirement in the form of a guaranteed income for life, with the many annuity options out there. For more on annuities, check out our dedicated page and if you would like us to do a no cost, no obligation analysis of your retirement planning/situation, give us a ring today!