Recent retirees are confused about what the costs are going to be when they retire according to recent surveys. Those people who are about to retire and those who suddenly find themselves push out of jobs before they were ready are often worried about whether they will have enough money to last them through retirement and what kind of quality of life they will have while retired. Most of us want to maintain our present lifestyle as a minimum and since we now have more time on our hands we want to be able to the things we never had time for. But the big question everyone wonders is, will they have sufficient income to live that life that they may be dreaming about.
What Are Consumers Concerned About
There are lots of things on the minds of people who are retiring these days that will affect how well they will live during retirement. We will list a few of these:
- · Property taxes seem to keep going up
- · Price of food is going up
- · Fluctuation of their investments
- · Cost of utilities continues to rise
- · What medical costs will they have
- · Have they set aside enough savings
- · Are these savings well invested
These are just a few of the items people worry about and there are a lot more. There are options that can be considered, such as working longer and spending less. These may not be the preferred options, however if there is not enough to go around, then some tough decisions sometimes need to be taken.
Impact of Inflation
The longer you are retired, the more inflation will creep into the picture and impact your purchasing power. Most people do not even think about inflation and are suddenly shocked when their indexed pensions if they are lucky enough to have them do not keep up with the rate of inflation. They have no choice but to cut back in other areas. Inflation will play a large impact even more since people are living longer than our parents ever did.
Start Saving for Retirement Now
If you are young and expecting social security in the US to pay for your retirement or CPP and OAS in Canada, think again. While this income certainly helps, it does not keep up with inflation and the amounts provided are not enough to live comfortably on. Retirees need to have either pension income or savings income to help them top up their annual income to live on. If you are young and reading this start saving now, if you are close to retirement evaluate your situation and make a decision to keep working or live on what you have. Avoid surprises if you can.
Get Help with Your Retirement Planning
Not everyone has the knowledge or the skills to plan their retirement. They may lack information about investments, yields, savings rates, payout strategies and investment strategies designed for the long term. They may not understand the impact of inflation or the various tax rates that apply in their situation.
Retirement Costs Confuse Soon-to-be Retirees – Tools
There are lots of tools available online that can assist some readers with their decisions. However there are really only two choices that you can make if you want to plan for retirement. The first is to find a retirement investment adviser that you trust. Then begin discussing your retirement objectives and goals, the assets you have. Focus on the assets you will need to achieve the kind of retirement that you want to have. Some people will just go on blind faith and let the adviser make all of the decisions. We do not encourage this at all. Be informed and learn as much as you can, which leads us to the second option.
The second option is teach yourself. Read everything you can about retirement planning and investing. Attend seminars, read books, talk to advisers. Learn to use the tools that can be purchased to help with investment planning and retirement planning. It may take effort, but it will be interesting and challenging which is something that we can all use while retired.
Personally I like a combination of the two. I have spent a lot of time investigating and learning about retirement strategies as well as investing. I make all of my own decisions. But before I act on them, I always run them past my adviser first and listen to his ideas and counsel. Then, I finalize my decision.
This is by far the best approach for me and I get a lot of satisfaction out of the effort, especially when these decision pay off. Sometimes they do not but that is part of the risk in life.