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Ever wonder what to be aware of in retirement years?

When it comes to retirement, reality and perception are two very different things. You may be putting your hard-earned cash into a pension fund each paycheck and you may be checking your accounts regularly.

However, if you’ve followed us for a while, you already know that retirement isn’t as simple a stashing away money.

In fact, most Americans aren’t even stashing away enough to see them through their post-working years. And when you factor in life’s little roadblocks such as educational costs, starting a family, buying a home or medical costs, retirement all too often falls by the wayside.

For baby boomers, these issues are even more pressing. While older individuals may be past the education/family-starting costs, other factors such as costs-of-living and medical expenses can be detrimental, particularly if you consider that, according to the Employee Benefit Research Institute, almost half (roughly 43{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439}) of baby boomers aren’t on track for their retirement needs.

The frightening truth about retirement actually occurs in the disparity between what pre-retirees think retirement will be like and what they find once they’ve exited the workforce. According to The Transamerica Center for Retirement Studies, the following are three of the most critical retirement findings that pre-retirees never see coming:

Roughly three-quarters of retirees regret not saving more consistently. 

You already know the saying “time is money”; however, when it comes to retirement savings, not only is time money but consistency is the key to making sure you have enough to subsist on in your later years. You want to be sure that you are setting aside a consistent amount per paycheck throughout your working years. 

The fact that most retirees have not saved consistently might not actually come as a shock to you, particularly if you’ve followed our blog. According to TCRS’s research, 76{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of retirees wish they had saved more regularly.

This is just the tip of the iceberg on their financial woes. Over 53{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} wish they had received more financial guidance from their employers and almost half (48{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} approximately) believe they did not start investing or saving as soon as they should have.

Essentially, the majority of individuals surveyed wish they had been more financially knowledgeable. One way to combat this in your pre-retirement years is to speak to a financial adviser who can help you not only get on track with your finances, but can provide you with the tools and resources you need to truly understand your finances and how they work.

A lot of retirees enter retirement earlier than they thought they would

In fact, three out of five retirees retire earlier than they had planned to, rather than stay in the work force until they get closer to retirement age.

Remaining in the workforce longer than you’d planned is beneficial for many reasons. For one thing, you will be delaying your Social Security benefits. Additionally, you will still have a steady salary coming in and will be able to use this to help pay for your expenses.  

While you may think working longer sounds like an excellent plan, the truth is there are a few things outside of your control that may force you into early retirement, such as layoffs and health issues.

TCRS found that 60{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of those surveyed actually retired earlier than they originally planned. Of these individuals, a mere 16{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} reported having enough funds to retire. And those who left due to the factors mentioned about? Twenty-seven percent reported having left because of health issues and 66{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} due to organizational changes. In contrast, only 7{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of individuals surveyed reported retiring later than they planned.

Less than 10{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of retirees were offered employer-sponsored retirement transition assistance.

This finding may be more impactful to your retirement than you think. Your retirement plan includes more than just saving and investing; it also should include a withdrawal strategy. Without a withdrawal strategy, you could wind up losing a lot of your pension to taxes.   

TCRS found that less than 10{bc669dfb3651bb8509a96034cbe7494d3a811fc0eedf0ddccb239fb9cb737439} of retirees received transition assistance when exiting the workforce. This “transition assistance” includes informational sessions to prepare retirees to exit the workforce as well as financial counseling.

So what does this mean for those preparing for retirement? Well, for one thing, you will need to be prepared to seek outside assistance to help you with a withdrawal strategy and tools and tip to manage your money during your retired years. Additionally, you will need to begin doing your research as soon as possible to see what kind of withdrawal strategy will work to help you maintain a strong financial future.

Bottom line

Your post-working years will comes with many challenges. If you found yourself reading this and getting anxious to exit the workforce, don’t worry. There is help.

A strong financial plan begins with knowledge. In order to go into your retired years with the tools necessary to succeed, you should begin by seeking the professional help and guidance of a financial adviser. Your retirement is your hard-earned future, so you want to make sure you are prepared to protect it.

Give us a call today. We’re happy to help business owners and employees alike prepare for the future.