The MegaMillions is Not Smart Retirement Planning: 4 Strategies for Improving Your Odds of a Happy Retirement

Last weekend’s record-breaking $656-million dollar MegaMillions Lotto jackpot definitely caused a buzz. But like most record-breaking jackpots before it, the dreams of hitting the big one were shattered by most as the numbers were announced. While definitely fun to dream about, the statistical odds of winning approach nil and planning your retirement on luck is definitely not a viable or promising future for Minnesota families. Instead of focusing on luck for your retirement planning, Secured Retirement Advisors recommends that you concentrate on those things you can control.

1)      Start Planning for Retirement Early: I’m confident that most readers are aware of the importance that saving early plays in increasing your likelihood of success in retirement. Living within a budget, paying off debt and systematic contributions into personal and retirement savings is generally a far superior strategy than praying for a big jackpot payday. Last week we discussed the Retirement Confidence Survey which finds that less than 56% of all workers have tried to calculate how much they will need in retirement. Due to such lax planning, it isn’t a surprise when we hear that only 14% of all families entering into retirement are confident that they will have enough to live on comfortably in retirement.

2)      Design for Income: While focusing on accumulation and growth of assets is a good decision for younger workers, those transitioning into retirement should start focusing on well designed distribution strategies with statistically high probabilities of lifetime success. Prior to retirement you should spend your career working for your money, but during retirement your money must start working for you. Visit with financial planning professionals who focus on the specific needs of families in retirement and can help you plan your best pension, social security and savings plan distribution strategies so that you can retire with confidence.

3)      Look out for Taxes: Visit with a planner who coordinates your investment planning with your tax planning.  Poor tax planning can erode your hard earned retirement savings. Focus on tax efficient investment strategies and tax smart withdrawal planning that increases your net returns.  Explore longer term tax-free strategies such as Roth IRAs or well designed life insurance which can offer tax-free income and more tax efficient and income distribution strategies.  Evaluate the impact that your retirement plan “required distributions” will have on your overall income planning early to avoid unexpected tax problems in your future years.

4)      Don’t Gamble it All!  One of the biggest retirement dream-snatchers is the depletion of your assets early in retirement. This can be caused by spending too much too soon, by health expenses, by poor investment performance and by the loss of buying power due to inflation. While growth is necessary to keep pace with inflation, don’t confuse prudent portfolio returns with speculation.  Remember the “Golden Rule” of retirement planning: It’s the “return of your money” which is more important than the “potential return on your money”. 

We have recently updated our website and now offer many FREE downloadable resources which can help answer many retirement questions. Feel free to visit us at www.securedretirements.com and help yourself to our educational materials.  If you would like a complementary “3 Step Review” of your own retirement plan, call Secured Retirement Advisors at 952-460-3260.