These Are Millionaires’ 3 Biggest Retirement Fears
No matter which camp you fall into, Gould said that “early planning is key.”
“Utilizing budgeting tools and projections can help maintain a comfortable standard of living,” he said. “Consider factors like travel, entertainment and other lifestyle expenses. Aiming to have at least 75% to 80% of your after-tax pre-retirement income can offer a solid financial cushion, but achieving this requires consistent saving and strategic planning throughout your working life.”
Outliving Their Savings
Millionaires’ No. 3 retirement concern is outliving their savings, with 30% asking the question, “Is it possible I could outlive my savings?”
“The risk of outliving your savings is a genuine concern,” Gould said. “Making well-informed financial decisions during retirement is crucial. Market fluctuations in stocks, bonds and real estate can impact your finances, so avoid making emotional, short-term decisions based on market movements.”
Gould said that most retirement planning mistakes occur within the first five years post-retirement.
“The newfound freedom often leads retirees to make significant purchases like cars or second homes, which can strain their financial resources,” he said.
“To mitigate this risk, it is essential to have a well-thought-out plan that dictates safe spending limits. Proper financial planning with conservative assumptions can help ensure that not only will you avoid running out of money, but you may also leave a legacy for future generations.”
Another thing to keep in mind is how your retirement savings are allocated.
“If, for instance, you add permanent life insurance to your financial plan, you’ll get additional benefits that you can use during your life,” Gould said.
“Permanent life insurance pays a lifelong death benefit and includes cash value, which grows on a tax-deferred basis and serves as a source of money you can tap during your life. Since the cash value of most permanent life insurance doesn’t decline with the market, it can be an important asset that works well with other aspects of your financial plan like investments.”
Editor’s note: Information sourced from Northwestern Mutual – Planning & Progress Study 2024.
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