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The 8 Don’t in Retirement Planning

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The 8 Don’t in Retirement Planning -- Retirement to be the daunting for some people. Only a few are actually measurable set retirement planning. Based on surveys conducted by the Employee Benefits Research Institute's Retirement Confidence Survey which, only 14% of interviewees (those approaching retirement) are very confident will be able to live comfortably after quitting work and as much as 60% of respondents had less than $ 25,000 in savings.
Retirement Planning
Not Having a Savings
This is the first thing that is forbidden to be ignored if you want to prepare retirement planning. The reason of course is simple. How could you be able to enjoy retirement, if not earning much less have no savings. Wise counsel, begin to set aside 10% of income as a pension fund.

Retire Time Assume predictable easily
Many of us are easy to set age limits to stop working. In fact, according to Katie Libbe, head of consumer insights at Allianz Life, two of five employees, will retire earlier than planned. Why? The main reason is job loss and illness. You can not even ensure you will be able to work part time. So it becomes very important for you to start saving early - while your health and career are on steady footing. Don't do this mistake for your retirement planning.

Ignoring the tax impact of distributions
In retirement, we will face with creating a game that is tax-efficient income. It’s helpful to have several kinds of accounts; from fully taxable to tax-deferred (401(k)) to tax-free (Roth IRA). It gives you flexibility when setting up the asset. Avoid taking early distributions. Nearly half of workplace retirement planning participants cash out their balances when they change jobs, Libbe notes. That triggers penalties and sets back the long-term growth of their assets.
Retirement Planning
Again, prepare for medical costs 
Pension plan health care costs are often overlooked. On average, workers who enter retirement at age 65, will spend $ 285,000 to fund health care in retirement. Even for those on Medicare, out-of-pocket expenses for people in retirement have jumped 50% the past decade. You must understand how to manage for this retirement planning.

Failed to lock in lifetime income
Guaranteed income pensions are fading away too. The most important challenge in retirement planning is how to convert savings into a reliable income stream so that they can be sure to cover fixed expenses for life. Social Security helps. An immediate fixed annuity is a good way to shore up this need


Retiring too soon 
Staying on the job a few extra years can boost your retirement income, by a third or more because it lets you avoid tapping savings right away and delay taking Social Security benefits, which increase about 8% every year you wait. Half of all Americans don’t even wait to their normal retirement age (66 for most) before collecting Social Security. If you are healthy, try to wait to age 70.

Underestimating longevity 
Some 60% of Americans live longer than they expect. At age 65, a woman can expect to live to an average of 84; the average for men is 81. But many will make it to 95 or even 100. To be safe, plan accordingly.

Drawing down retirement savings too rapidly 
If you don’t want to outlive your money, keep your annual drawdown rate to 4% of assets. At that rate, if you begin withdrawals at age 65 you should have income to age 95.
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