Are you really as prepared for retirement as you think you are? The recent National Retirement Risk Index (NRRI) suggests that 52% of Americans are at risk of not being able to maintain their current standard of living when they retire but 57% of Americans have realistically assessed their retirement situation, whether they are on track or behind. This was calculated through a study by the Center for Retirement Research at Boston College.
The "at-risk" percentage by NRRI standards has increased by eight percentage points since the 2004 survey. Are you one of the reasons why? See if any of these eight categories of retirement misunderstanding apply to you.
A defined contribution plan, such as a 401(k), requires you to put in enough funds to have a suitably sized nest egg to meet your retirement needs. If you don't understand compounding interest and the time value of money, you may not contribute enough, not start early enough, or fail to give your retirement funds sufficient priority.
While a college degree may increase the likelihood that you are properly assessing retirement, there are plenty of graduates who can't handle financial planning just as there are savvy planners who didn't graduate from college but are well versed in life skills. Don't hesitate to seek help if you don't understand retirement planning regardless of your education level.
The best way to insure you meet your retirement goals is to set a realistic annual budget for retirement. Lay out your expected expenses and income sources and see how they match up. MoneyTips offers a retirement calculator to help you run various scenarios and determine whether or not you are on track. Be sure to include significant padding for things like increased medical expenses.
Don't let false perceptions of wealth derail your retirement plans. Educate yourself on retirement options and start planning now, and you'll strike the best balance between preparing for a comfortable retirement and enjoying life in the working years.
Regardless of where you plan to retire, the number onefactor in ensuring that you can retire on your terms is your 401(k). Make surethat your 401(k) is maximizing its potential with this free analysis that checks your fees, fund mix, and other factors to help you hit yourretirement goals.
Originally Posted at: https://www.moneytips.com/8-reasons-you-may-actually-be-unprepared-for-retirement/859
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