Are You Ready for Retirement?

“You need to make sure you do not outlive your money,” stated James Mathieu, financial advisor for Wells Fargo, during a seminar Tuesday on retirement planning at library. Such a simple concept, but with the ever increasing life expectancy, it is a very real concern.

Through the informative presentation, Mathieu empowered the audience to take control of their financial lives using a few simple—but powerful—guidelines to ensure that they do not outlive their money. 

He pointed out that regardless of age and how much has been saved it is always important to review your assets and see if you can make them better work for you.

“Don’t let your finances control you; make certain you control your finances,” was the mantra of the evening.

Mathieu presented the nine basic mistakes people make when saving for retirement.

1. Forgetting about the effects of inflation-  $1 today will only be worth 44 cents 20 years from now.
2. Not having a proper asset allocation for your portfolio-Don’t get married to a stock. They are there to be bought and sold.
3. Underestimating the effect of taxes-When the opportunity is available, always opt for tax deferral.
4. Underestimating spending during retirement -Many people spend the same or more in retirement.
5. Having unrealistic investment expectations-Make a plan and execute. The market will go up and down—don’t chase returns.
6. Relying solely on your portfolio’s investment return- Can create income- and estate tax issues for heirs.
7. Understanding the time you will spend in retirement-You may live a lot longer than you think.
8. Mismanaging tax-deferred assets-Do not spend from your tax deferred investments first.
9. Failing to plan for unexpected health care expenses-Long-term care expenses are a major risk to your nest egg.

Failing to plan for unexpected heath care expenses was one of the most important points discussed. Nursing home care, or even long-term rehabilitation can tear though savings very quickly.

Mathieu pointed out that long-term care insurance is something that all retirees should consider in order to protect what they have. While not affordable for everyone, many are not aware of this option.

Regarding all financial matters, Mathieu reminded everyone that “Doing nothing is the equivalent of getting hurt.” Not taking control of one's own retirement plan will result in losing money.