Millions of Americans have dreams of retiring and living the life they’ve always wanted to. But many of their plans rely on everything to happen absolutely perfectly in order for those dreams to be fulfilled. If anything should go wrong, their dreams will end up dashed to pieces.
Even the best-laid plans, those in which investors save more than necessary, make the right investments, and seem to be on the right track to retiring comfortably, can be upended by unforeseen problems. Whether it’s loss of a job, a health incident, or a financial crisis, investors need to make sure that they’re prepared to weather any possibility.
That requires investors constantly to reassess their investment portfolios, their timelines, and their expectations about the future. Failing to do that on a regular basis and to make changes to their investment strategies when necessary could undo decades of hard work, diligent saving, and careful investing.
How Secure Is Your Job?
Most people expect that they’ll be able to retire on their own initiative. They may plan to work to 55 before calling it quits, or to work to 65, or to work until they’re no longer able to. But what if your employer has other ideas?
Everyone knows that older employees cost more to employ. Whether it’s higher salaries, higher healthcare costs, or other factors, many companies looking to cut costs start by letting go of their older, more expensive employees. They don’t have to get someone fresh out of school either. Someone 10-15 years your junior may have enough experience and be willing to work for less.
That means that you constantly have to reassess how secure your job is. Are you indispensable to your company? Do you fill a role that no one else inside or outside the company can? Do you have institutional knowledge that requires other people in the company to depend upon you heavily? Or are you just another cog in the wheel, someone whose position could be eliminated at any time if need be?
Even if your job is one that you judge to be secure, a worsening economy could change all of that in an instant. The odds of the next financial crisis being worse than the last one are much greater, and that could put millions of American workers at risk of layoffs. And for older workers, the chances of finding work after a layoff, especially work that paid as much as your previous job, are much lower.
If you’re planning to work at 65 and suddenly find yourself out of a job at 57, can your retirement plans afford eight years in which you might not be bringing in any money at all? Or if you’re planning to retire at 55 and find yourself laid off at 47, can your retirement plans deal with eight years of underemployment? While you can’t fully plan for every eventuality, making sure that you have more than enough money saved up can help you weather these types of crises.
As we age, we have to come to grips with the fact that we’re not as bulletproof as we thought we were. Slower reflexes, difficulties with memory, and aches and pains begin to assail us. And for all too many people, serious illnesses such as cancer, diabetes, and heart disease begin to rear their heads.
One thing that many investors fail to take account of is rising healthcare costs in retirement. By many estimations healthcare costs in retirement will increase faster than average annual investment returns. That means that many retirees can expect healthcare costs to be the primary factor eating up their retirement savings capital. And that’s just the average.
What happens to those with serious illnesses? And what happens if the onset of those illnesses occurs before retirement? What if you get diagnosed with cancer years before you plan to retire and end up having to leave the workforce early? Are your retirement savings robust enough to support you if that happens?
While all of us hope to live to a ripe old age, what happens when we live so long that we run out of retirement savings? That’s increasingly becoming the case for many more Americans.
While the average life expectancy for Americans is over 78 years right now, the average 78-year-old can expect to live another 9-11 years. And the average 65-year-old can expect to live another 18-20 years. That means that living 20-25 years post-retirement won’t be out of the ordinary for those who retire at 65. And for those fortunate enough to retire at 55, they could very well spend as much time retired as they did working.
If your retirement planning doesn’t account for that, or if you fail to reduce your spending enough to make sure that your retirement savings last you through your golden years, you could find yourself living your last few years in poverty. Don’t let that happen to you.
Make sure that you’re investing as much as you can, as often as you can. You can never have too much money saved up and being put to work for you. Make sure also that your retirement savings are well diversified and include assets such as gold that offer protection against the risk of financial crisis and economic turmoil. Thousands of investors can attest to the benefits of investing in gold, which has seen its price increase astronomically since 2000 while stock markets have seen two major crashes and are soon to see a third.
In a world in which pensions have all but disappeared, Social Security is all but dead, and family members no longer are able to help each other out, your ability to retire comfortably is dependent on your ability to save the money that you need to live out your golden years the way you always wanted.
Don’t cheat yourself by saving too little now and wishing in the future that you had done more. Take the right steps to ensure that you can make your retirement dreams a reality.
Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.
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