Let’s talk about retirement. No work. Beach Town. Spending time with the grandkids. Golf. Hobbies. Doing what you want.
And no money? Rather than the idyllic retirement that many dream of, many Americans will be faced with a financial shortfall as they prepare for retirement.
Terry Parham Jr is the Co-Founder & Financial Planner at Innovative Wealth Building. He shared some of the mistakes people make as they prepare for retirement and some of the dangers they face.
Assuming They Will Be Mortgage-Free
One common mistake people make is assuming they will have a mortgage-free home by the time they retire. While this is a commendable goal and achievable for some, approximately 35% of retiring homeowners will still have a mortgage. Failing to plan for this expense can leave individuals unprepared for meeting their retirement spending goals.
Not Considering Inflation
Another mistake is not considering the impact of inflation on spending goals. A spending target that starts at $3,000 per month can easily increase to $4,000 per month over ten years with a 3% inflation rate. When compounding over a 30 year retirement time horizon, the differences in total dollars needed can be quite drastic.
Not Counting Healthcare Costs
Many people do not accurately account for healthcare costs. According to a study by Fidelity, retiree healthcare expenses average around $500 per person per month. These costs are expected to grow at approximately 5% per year, which is significantly higher than general inflation. Furthermore, this estimate does not include long-term care expenses, which can be a substantial financial burden in retirement.
13 Signs You’re Financially Better Off Than the Average American
Achieving financial stability where you can meet your current financial obligations comfortably and still plan for the future is a goal everyone strives to attain.
However, while you may be able to pay your bills, save for vacations, and afford to dine out occasionally, you may feel left behind, especially if you compare yourself with your peers or others with higher salaries. You may be doing way better financially than the average American.
13 Signs You’re Financially Better off Than the Average American
8 Things the Middle Class Won’t Be Able to Afford in Five Years
Unfortunately, inflation’s vice grip on the middle class shows no sign of relenting anytime soon. Here are eight things about to get significantly more expensive for those in the middle of the pack to fit into their quickly tightening budgets.
8 Things the Middle Class Won’t Be Able to Afford in Five Years
20 Luxuries That Were Attainable 50 Years Ago That Now Escape the Middle Class
Specific experiences and commodities from the past were part of everyday life, accessible to most, and cherished by many. Fast forward half a century, and you’ll find these once-common threads have become silken and exclusive, reserved for the wallets of the well-to-do.
The landscape has shifted from leisure activities that bond families and friends to necessities that ensure health and happiness.
20 Luxuries That Were Attainable 50 Years Ago That Now Escape the Middle Class
14 Companies That Will Give You Free Food and Products Just for Asking
More companies are now offering free samples to get customers to try a new product. Over time, these companies gain loyal customers and can increase their sales. As a customer, you also get to test out free products and sample foods you’ve never tasted.
Here are some companies that will give you food and products for free just by asking.
14 Companies That Will Give You Free Food and Products Just for Asking