5 Factors That Can Derail Your Retirement Plans

Filed under: Retirement

senior couple driving motorcycle with dynamic backgroundMost of us hope to retire by age 65, and might believe ourselves to be on the right track. Hopefully, you will reach your retirement goals without a problem. But for some of us, the following five factors can significantly derail our plans, if we don’t expect and prepare for them.

You didn’t save enough. You know that you need to save for retirement, but are you saving enough? According to the National Retirement Risk Index, 52 percent of us will not be able to retire at age 65 and maintain our current standards of living.

You’re relying on the stock market to perform well. If you began planning and saving for retirement early in your career, you might be able to build significant capital through slow and steady growth in your portfolio. But if you didn’t begin saving until your 50s, you have some catching up to do. Unfortunately, counting upon short term gains can be risky, and you might not be ready to retire if the market doesn’t perform as well as you hope.

Your mortgage is weighing you down. You might have chosen a 30 year mortgage because the monthly payments were lower. Perhaps you even formulated a plan to pay off the debt early. But in reality, you know that you will still be making that mortgage payment when you retire. If you can, refinance into a 15-year mortgage with a lower interest rate, and try to pay off your home before you retire.

You’re hoping the economy continues to improve. In 2008 and 2009, poor economic conditions impacted millions of Americans who had been on the verge of retirement. Things are looking up now, but the future of the economy is unpredictable. If you’re counting upon a particular retirement date, talk to your financial advisor about different ways to ensure guaranteed streams of income.

You might owe taxes on your Social Security benefits. If you claim your Social Security benefits before your full retirement age, you could owe taxes depending upon your overall taxable income. This means that your monthly income doesn’t amount to what you had hoped. Estimate all of your income from retirement plan distributions, and calculate possible Social Security taxes before retiring. If you’re waiting until full retirement age, however, you won’t have to worry about taxes on your benefits.

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This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: www.NAMCOA.com .