Items to watch out for when planning your retirement - Personal ...

Retirement is likely several decades away for me.? However, that means that the best time to start planning is now, when I can take advantage of compounding interest, stock market gains, and dividend re-investments.? However, planning for retirement takes lots of coordination.? There can be unseen events such as a layoff or downturn in the stock market that can affect one?s retirement plans.? Therefore, even these unknowns must be planned for.

One of the largest things to watch out for is not calculating how much retirement savings to have.? While $100,000 sounds like a lot of money to most, $100,000 could only last the average person a few years before running out.? Common wisdom estimates that over $1,000,000 is needed for each person in retirement, and an expected withdrawal rate of 4% a year until all of the funds are depleted.

Start early.? Time allows for you to take advantage of all the ways to grow your income.? These include the stock plans and dividends mentioned earlier, but also take into consideration the obtainment of a Bachelor?s degree if you do not have one.? Yes it will take years to get one and the struggle will be long and hard.? But, it is one of the greatest ways that one can increase his or her income.? On the flip side, watch out for retiring too early.? This is why I will not retire until my investment income far exceeds my daily living expenses.

Use what is available to you.? You have many retirement tools available.? Make use of them!? There are individual stock plans and brokers.? Some employers offer 401k programs.? Any individual with taxable income can sign up for a Roth IRA.

When investing, be weary of bad advice.? Financial planners do not always have your best interests at heart.? Some will sell you items that they can add commissions and fees to or have other financial interests.? Often their advice will be wrong.? Seek out multiple sources of information.? I like reading various blogs.? They allow me to get many perspectives on the issue and not worry about group think mentality.

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