Smart Retirement Planning

Think about your retirement. Some seniors are careful and consistent about planning and devoted to the plan like a religion while others spend in the moment and don’t even think about retirement until it is staring them in the face. Does planning devotion always win the war over gut instinct?

If history is our guide, vast numbers of the workers in the world are poor planners and over estimate the value of their gut instincts.

Let’s look how to avoid trouble.

Gut Instinct:

If you are picking stock prices for a trade tomorrow, you will likely be more accurate than if you must forecast your favorite company stock’s price 15 years in the future.

The Fact:

Studies confirm that holding stock for long periods is less risky and over time most stocks will enjoy positive returns. And the best performing asset classes over time are stocks and real estate so plan accordingly.

Gut Instinct:

Always use professional managers.

The Fact:

For most seniors, using a high qualified advisor is a good decision but it is critical to remain active involved in the decision being made. Don’t spend more time trimming your roses than reviewing your retirement and saving plans.

Gut Instinct:

You don’t lose until you sell so hold everything in bad markets.

The Fact:
Holding losing stocks is a money losing strategy. This myth stems from the IRS rules for when you can claim a loss for tax purposes. You real money loss is still the same regardless of when you decide to acknowledge it to the IRS.

Gut Instinct:

Buy and hold strategies are the best.

The Fact:
Too many investors think they can simply sell a losing stock and then buy it back again. Some are trapped in the IRS wash-sale rules which can void your capital loss if you don’t manage the transaction correctly. Get some advice before taking action.

Gut Instinct:

Don’t worry be happy…there is plenty of time before retirement.

The Fact:
Time slips by and too many seniors are bitten on the behind for lack of attention and control. Savings plans and investment accounts require time and some good fortune to reach needed levels. Starting too late is a almost guaranteed retirement failure.

Gut Instinct:

At the point of retirement, put all your savings in secure, low risk investments.

The Fact:

If 65 years is your target retirement date, most seniors don’t realize they have 25 to 30 years to live. Dumping all your investment into secure investments does not provide the growth needed to stretch your resources throughout your entire life. A portion of your investments should remain in higher performing equities.

Gut Instinct:

I can get by with some savings and my Social Security check.

The Fact:
Many seniors today question whether Social Security will be around in 20 years. Assuming it is, the income is barely life sustaining and in most cases won’t even cover your basic living costs. Counting on Social Security is a questionable strategy for retirement planning purposes.

If just a few of your outdated beliefs regarding retirement planning having been shaken, then this article may have been useful. Find a good advisor and get a review of your current situation and starting actively planning for retirement now.

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About The Author
For more than 20 years, Karl Edmunds has been a noted author within the business and management consulting arena. As a senior, he now engages his curiosity and observations about life to write about key issues of importance to the growing community of seniors (Boomers), and the value of living life to the fullest every single day. Give me your comments and suggests at http://Plan-Retirement.org or http://For-Seniors.org