I once ran into a retiree who had a considerable amount of wealth and lived very luxuriously. Over the course of our conversation it was discovered that he had spent his entire life working as a janitor of an elementary school. Floored, I asked the obvious, “How did you accumulate such worth in such a moderate career?” He replied, “I just started putting money into a retirement account when I first began work here, a little bit each paycheck.”
How do some people retire in such ease and others struggle to keep up with inflation after quitting work? Sadly, many people fall into some of the most common retirement planning mistakes as are listed below. Take note to these mistakes and be sure to avoid them so you can retire in ease.
Waiting until you're 55. The number one retirement mistake people face is not beginning planning soon enough. Beginning early makes all the difference in the long run, for if begun early enough, your retirement total will not be as impacted by your immediate salary. Allowing time to compound your wealth will give you a more comfortable retirement.
Decide what percent is enough. Another common mistake people make in planning is assuming too small of a percentage of their yearly income. True, times are tough and money is not at a surplus currently, but if you make retirement planning a priority, your sacrifice now will pay off for years to come. Determining your percentage of investment depends on several factors. Consult a financial planner for help in setting a percentage to invest.
An undetermined goal. True, beginning early is key, but when you begin, take time to set a goal for your retirement total. This step will take strategic planning and help from someone in the business of retirement planning. Not only must you set a goal for a comfortable life after retirement, but you must assume inflation for such a time.
Using retirement monies now. With the downturn of the economy many people were forced to look to alternative means of income for a time. Many looked to retirement accounts and pulled monies saved for the future. If you can ever avoid it, don't use the monies in your retirement account. Besides the fact you'll need these monies in the future, often penalties and taxes are charged on monies removed from retirement accounts prematurely.
Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at (661) 426-2499 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.