No matter how old you are, your retirement planning strategy will determine your standard of living in the future. Ask yourself, are you prioritizing the right kind of investments? Are you getting advice from the right people? Will you be prepared for any unexpected expenses that may come up? Retirement planning is complex and there are many factors to consider. At Crash Proof Retirement®, we have helped thousands of people achieve a secure retirement by educating Americans about safe market alternatives that would serve their best interests in retirement. Here are the five biggest mistakes that we see people making with their retirement plans:
Not Planning for Long-Term Care Expenses
Long-term care expenses are the biggest threat to Americans’ retirement security as 70% of Americans will need long-term care during their retirement. A private room in a skilled care facility, like a nursing home, can cost more than $100,000 per year. Long-term care expenses are projected to increase exponentially over the next 10 years, which raises the importance of Americans protecting themselves before facing the risk of depleting their nest egg. Even if you have a sizable nest egg, your assets can be quickly depleted if you are not protected. Not obtaining a long-term care policy also raises the risk of adding undue stress onto loved ones who would be tasked with providing necessary care. If you’re worried about the burden of long-term care expenses on you and your family, meet with a retirement phase expert to receive a valuable education about obtaining a long-term care insurance policy to ensure that your assets are fully protected.
Too Much Risk in Your Portfolio
Most financial advisors will recommend securities-based financial investments—like stocks, bonds, mutual funds, and even volatile cryptocurrencies—to anyone who walks into their office. The retirement phase experts at Crash Proof Retirement® understand that risk-based securities are not appropriate for retirement phase investors. As you age, it is crucial that you transfer your money out of risk-based securities and invest that money in secure financial vehicles that have a proven track record of protecting investors’ assets in the event of a market crash. If you fail to mitigate risk in your portfolio, the next market crash could delay your retirement plans, or worse, force you to accept a lower standard of living in your golden years while you attempt to regain what you lost.
Choosing the Wrong Advisor
Most financial advisors will recommend stocks, bonds, and mutual funds to their clients, regardless of their age, because risky securities earn the largest commissions. If you’re over 50 years old and your financial advisor ignores investment vehicles that offer guaranteed protection for investors, then now is the time to meet with a retirement phase expert. As a retirement phase investor, you need to protect your retirement with investment vehicles that guarantee principal protection and credit interest that compounds annually. Doing so will help you avoid the downside risk of investing in the stock market, which can erode your nest egg during your golden years. Retirement phase experts have a fiduciary responsibility to put your needs before their own and are equipped with the tools to educate retirees about safe alternatives to Wall Street’s catalog of risk investments.
Carrying Too Much Debt into Retirement
Mortgages, car loans, student loans, and credit cards are the main sources of debt for most Americans. When you’re in retirement, living on a fixed income may limit your ability to pay off debt. With interest rates at historic lows, it is especially important to focus on paying off debt because rising interest rates will make debt more expensive. It may help to prioritize debt with higher interest rates, like credit cards, especially if you have loans with variable interest rates. If you are carrying a high mortgage balance, you may even want to consider downsizing your home to increase your disposable income.
Not Taking Advantage of Tax-Deferred Investments
There are many types of retirement accounts that grow tax deferred. IRAs, 401k plans, and more can help you reduce your tax liability today so you can have more money to save for the future. If you are not taking advantage of these tax-deferred investments, nor reaching your contribution limits every year (including making catch-up contributions when you are over the age of 50), you may not have enough money saved for retirement. Catch-up contributions are especially important as they help investors over the age of 50 stow away additional funds to boost their savings during their golden years.
Of course, with taxes projected to increase, you may want to take advantage of a Roth IRA. By investing or converting to a Roth IRA, you will pay taxes today based on your current tax brackets, while enabling your money to grow tax free for the remainder of your life. Roth IRAs also eliminates the need to take required minimum distributions during retirement. Speaking to a retirement phase expert can help you determine what strategies and accounts are most suitable to meet your retirement financial needs.
Safe Retirement Planning for the Future
If you want to avoid these common mistakes in your retirement planning, schedule to meet with the retirement phase experts at Crash Proof Retirement®. The Crash Proof Retirement® team has helped more than 5,000 retirees throughout the country protect their nest eggs with investment strategies that put investors’ financial needs first. Our exclusive Crash Proof Retirement® System offers solutions to stock market volatility and the rising costs of long-term care, so you can enjoy retirement with guaranteed principal protection and credited interest that can never be taken away. To learn more about how you can have a Crash Proof Retirement®, call 1-800-722-9728 or visit www.crashproofretirement.com and schedule your complimentary financial checkup.