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4 Steps to Avoid Retirement Roadblocks

December 1, 2014

No one is immune to major life changes, but there are some tips that can help ensure that your retirement isn’t derailed:[1]

1. Start saving now

Albert Einstein once reputedly said, “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”[2] If compound interest is known as a powerful force in the universe,what are you waiting for? Starting to save for retirement just a few years earlier can make a huge impact in your long term financial wellness. Leverage time as your greatest asset.

2. Strategize: Save now to spend later

Discretionary expenses like vacations and dining out can really add up. It’s critical to make a budget for the lifestyle you are living today- including all of your current expenditures. Your budget today will directly affect your retirement budget and your income as you age.


Budget burnout is a common challenge and it can help to have a system to keep to your plan in place. Our one caveat: Create a system that works for you.

For instance, every time you skip buying a drink in public when you really want one, and you transfer that money towards an interest earning savings account, you will find a small amount of money can accumulate quickly. Perhaps having those little wins throughout the day can motivate you and keep you invested in your budget over time.

You may find that your plan incorporates cutting back on current spending, scaling back on your retirement expectations, or both. If you’re looking for some suggestions on what type of budget may work for you, check out our Budgeting Blog: Plan your life. Don’t stop living it.


3. Prepare a flexible retirement plan
Dreaming about retirement can only get you so far. What does your retirement look like? What are your goals? How are you going to get there? Write it all down. When you have an idea of what you want your retirement to look like, it will be time to make sure you will have the income to support your goals.

Designing your retirement income is not as simple as drawing down all of your assets until you have nothing left. Working with someone who is trained in retirement income planning—who understands how to leverage your assets over time—can provide opportunities you may not even realize are available to you.

Having a plan that you understand and that you believe in for retirement, is integral to ensure that you have a strategy and guide posts in place to help you reach your goals despite any unexpected life events.


4. Have a candid conversation with your parents/family members whom you might care for in old age

These conversations are never easy to have, but the realities are even harder to face if you wait until it’s too late. Find out how your family would like to be cared for and if they have a long-term care plan in place. Long-term care insurance is something you and your aging family members should consider when you are healthy.

In addition to the support that Investment Answers can provide, we have additional community resources that we share so that you can have a neutral party involved in end of life or disaster planning. Oftentimes, having such resources can help your family communicate more effectively.

Want to learn more?

Our list of Top 10 Retirement Roadblocks and tips for Getting Back on Track can give you an idea of what obstacles you may face when planning your retirement. Knowledge is power and time is one of your most valuable assets. Contact us and start planning today.

[1] Investment Answers Winter 2014 Newsletter

[2] Roth, Allan. “Compound Interest — The Most Powerful Force in the Universe?” June 7, 2011.