Millions of people in the US experience financial challenges every single day. Individuals entering their retirement years are doing so during a period considered the worst in economic downturn since the Great Depression. Baby boomers have observed up to 50% shrinkage in their retirement accounts, a real estate market that has been completely decimated, low yields are expected on CDs and bonds, as well as exceptionally high unemployment rates are contributing factors.
All of these, with the inclusion of higher life expectancy, means trouble for those planning for their retirement. By avoiding common mistakes, many have the ability to plan a comfortable retirement.
Mistake #1: Starting Retirement Savings Too Late
The first – and possibly the most common mistake – experienced in planning retirement is starting too late.
People are busy saving for their child’s education, paying off your home, or dwindling down debt first. Remember to also consider your future and start saving a percentage of your money for retirement as early as possible.
Even if you save a small amount consistently each year, coupled with compound interest, you will end up with a significant amount in your retirement fund when you need it most. But how much is enough?
Mistake #2: Not Saving Enough
With all that money dedicated to other things, it’s hard to figure how how much to put away. When saving for retirement, you must make many considerations. These include the length of time you have until you reach retirement, how much you have previously saved for the endeavor, your future expenses, and standard inflation.
Ideally, you should set up an automatic savings with your local bank. Then, you should commit – at minimum – 10% of your total earnings to that account.
Many financial advisors claim that 20% to 30% is best. Eventually, you will be able to adjust to not having this money and meet your budgeting needs.
Then, when you are ready to retire, the amount that you have saved – plus, the interest that you have earned – will allow you to retire comfortably.
Mistake #3: Falling for Retirement or Investment Scams
Each day, millions of people across the nation are “tricked” into falling for investment scams or retirement scams. These may come as a phone call, a letter in the mail, an email, an online advertisement, or even a door-to-door salesman. The rule of thumb is, if it sounds too good to be really true, it probably is. If you want to make investments, you should consult with a financial advisor at your local bank in order to establish its legitimacy.
We Can Assist You
We here at Somerville Bank know and understand just how important your money and your future are to you. If you are ready to start planning for your retirement, we can assist you. We have the ability to set up a special retirement savings account and guide you – based on your individual needs.
For more information or to start the process, visit us today at one of our Many Locations