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Top 3 Reasons You Won't Retire Before You Die

By: Logan Erickson | 5-18-2023

Retirement planning presents a multifaceted challenge, encompassing many variables and unknowns. Failure to adequately grapple with these unknowns typically results in three problematic pitfalls: starting too late, inadequate savings, and excessive caution in investing. 

Initially, many individuals defer retirement planning until age 30 predominantly due to the overwhelming nature of saving for retirement. These variables include forecasting inflation, appraising social security benefits, sizing up the family unit, discerning prospective pension types, anticipating future financial performance of assets, and evaluating an expansive range of investment alternatives. Moreover, approximating the required funds for a desired retirement at varying ages further complicates matters. Other pressing fiscal priorities, such as purchasing a residence or paying back student loans, frequently take precedence over retirement planning. 

As a recent college graduate, I would begin planning early, understanding the importance of compounding and the worth of having greater flexibility to market volatility. 

The second pitfall is insufficient savings. Many individuals fail to reserve ample funds for their golden years. While the suggested savings range is usually between 10-13% of pre-tax earnings, this may vary significantly depending on individual conditions. Therefore, I would focus on the significance of budgeting and staying within one's means, illustrating to clients how minor sacrifices today can translate into substantial fiscal security in the future. Finally, investing excessively conservatively is a pitfall that can yield diminutive nest eggs that may not support a comfortable retirement. 

People who start their retirement planning earlier in life can weather market volatility over an extended time span, empowering them to undertake ventures with heightened risk potential that may entail loftier returns. Nevertheless, the apprehension of losses frequently brings cautious investment strategies. Make sure you understand the importance of a diversified portfolio, explicating how a blend of low-risk and high-risk assets can optimize returns while mitigating risk. 

To evade these common pitfalls, it is crucial to start retirement planning early, amass ample savings, and invest prudently.