Those nearing retirement likely just want to stop worrying about money. Do I have enough in my individual retirement account? Will inflation significantly impact the value of my savings?
Retirement planning can seem like a daunting task, but when it comes down to it, it's the best way to avoid future stresses and yes, even obtain financial peace of mind. But a successful retirement cannot be achieved without adequate planning.
The University of Michigan Retirement Research Center recently published a paper that showed older Americans are more susceptible to income shocks. According to the data, individuals over 50 have more money than those 25 to 50. And like they say, "The bigger they are, the harder they fall," and having more money could mean someone is susceptible to greater income losses, such as if they were to get fired, for example. So, when it comes to these income shocks – losing a job or getting hurt or sick – how does that factor into retirement?
It's something you plan for
Baby boomers are being offered more retirement tools and solutions than ever, so it's critical to take advantage of these when figuring out how to plan for retirement. And once a sound strategy is in place, they need to stick with it.
"Regardless of where you fall in the income spectrum, creating and maintaining a retirement-planning strategy gives you a significantly higher probability of preserving enough assets/income to last your lifetime," said Sarah Carlson-Rieger, the founder of the financial planning firm Fulcrum Financial Group. "For the fortunate [person] who has plenty of assets to last their lifetime, good planning leads to good stewardship of assets and an incredible opportunity to leave a purposeful legacy."
Keep on saving
No one knows what life will bring tomorrow, so it's important to save today. Even if someone is financial well-off, nothing is a guarantee.
"While unemployment insurance may cover some of the lost income, an emergency fund becomes very important for this group," said Barry Mulholland, an assistant professor at Texas Tech University. "Disability insurance is also important to have in place before the disability occurs, since it is more difficult to obtain with age or declining health. Both of these risk management tools require the individual to plan early so they can take appropriate measures to have the protection in place should the need arise."
Mitigating risks for retirement means creating the strategy now to effectively plan for everything later.
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