Keeping retirement planning in perspectiveNovember 2016 / Share
Retirement offers older consumers an opportunity to kick back and enjoy life after years of hard work. Successful retirement planning begins early, when a person first starts to earn money, and it doesn't stop when they leave the workforce. In fact, careful money management in retirement is critical to a long and successful time spent out of the workforce.
Unfortunately, too many consumers view retirement as an opportunity to indulge in unnecessary expenditures. While a high net worth client might be able to cover the cost of the boat of their dreams, doing so might affect their nest egg in dangerous ways. Families of any background need to consider the amount of money they will pass on to their children, and poor financial judgment can swiftly diminish the amount destined for the next generation.
That means workers and homeowners need to maintain good financial decision making in retirement. Otherwise, poor spending habits can get in the way of their financial goals
Retirement success often hinges on consumers' ability to realistically assess their personal retirement goal. A person's desires should influence the way they save for retirement and how they budget their savings once they leave their job.
Many factors contribute to a person's retirement plan, and each can have a serious impact on how a person approaches their twilight years. For example, many consumers want to remain in their current home during retirement rather than downsizing or transitioning to life in a retirement home. This obviously changes the way they need to plan for retirement, because it can change a person's financial needs substantially.
Homes are expensive to maintain, and staying in a large house can mean high maintenance costs for a retired individual. The New York Times reported that many home renovations and updates cost several thousand dollars , which can be a major strain for anyone on a fixed income. While the people who have the means to work with a financial professional are generally not in danger of depleting their retirement savings, it's critical that they keep their principle intact for the next generation. Maintaining a home can make that difficult, and it's the type of expense that is easy for people to overlook as they hurtle toward retirement.
Considerations for professionals
Workers and savers of all stripes need to find a way to accommodate their personal financial goals, which are likely to change over time. More importantly, any financial professional they work with needs to act as a partner who can point out how certain decisions will affect a client's ability to reach his or her goals. This is why regular policy reviews are a critical part of any relationship between a financial professional and their client.
During a policy review, it's possible to discover how a person wants to use their retirement savings and can point them toward products that will make those goals a reality. Because a person's income can fluctuate in life, and their financial goals for retirement change over time, it's important to adjust their savings and insurance in ways that support their shifting aims.
Vectra Bank can help you manage your retirement savings.
The views and opinions expressed by the author may not be the views and opinion of Vectra Bank. The information presented is presented for general informational purposes only and does not constitute tax, legal, investment or business advice.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.