Planning for Retirement: 3 Financial Solutions
1. Plan for the worst and hope for the best. When planning for the future, as one does for retirement, there are a fair amount of assumptions that must be made. That is why it is extremely important to stress test any retirement plan to ensure it can stand up to any unpredictable events, such as a market recession, tax increases, and added healthcare expenses. This will help retirees comfortably deal with unforeseeable financial concerns.
2. Account for inflation in expenses. Not only does one need to include adjustments for inflation, but they should also account for certain expenses inflating at different rates. For example, healthcare expenses increase at nearly twice the rate as consumer goods. Not to mention, as people age, their need for healthcare increases as well. On the other hand, vacation expenses should account for inflation of costs but will most likely decline or disappear as the retiree ages and does not participate in extensive travel.
3. Create a retirement plan with flexibility. The only thing certain when it comes to retirement planning is the fact that things will change. Most people plan to spend 10, 20, or even 30 years in retirement. That is why it is so important to build in contingency plans for various financial scenarios. The right financial planner can assist in identifying any blind spots in the plan, such as changing tax environments or fluctuating markets. They can also help with monitoring and adjusting the plan to keep goals on track.
Source: Kinetic Financial
Published with permission from RISMedia.