Do You Make These Retirement Planning Mistakes?

The goal of retirement planning to assess a person’s readiness to retire given desired retirement age and lifestyle and whether they have enough money to afford to retire.

There are now plenty of web-based tools that’s will allow a person to write out a financial plan without the help of a costly financial adviser. These so called do-it-yourself(DIY) tools offer mathematical models and decision support systems to help you make the best decisions in retirement planning.

The reality is people are living longer. According to a 2006 Social Secuirty Trustees Report, a 65- year old man is expected to live to 82 years and a 65-year old woman is expected to live to 85 years. The key is that you need to plan. The experts say that a typical retiree needs at least 70 to 80 percent of their pre-retirement income.

You need to consider you lifestyle choice as well. How and where you live can greatly effect the quality of life you seek. You must ask yourself “Do I want to stay in my present home for as long as possible or am I OK somewhere else? You might decide to move into a smaller house, which can give you a major tax break if you sell your house. A married couple that files jointly can earn upwards of $500,00 on the sale of their primary home and not have to pay federal income taxes on the gain. Another advantage of the tax break is that you don’t have to be 55 or older as was the case before.

You also need to consider your health. Your health is an unpredictable factor. Health expenses can alter the amount you need in retirement and medical problems may put a damper on your retirement planning You may consider long term care insurance.

Last Modified April 27, 2009 @ 11:28 pm
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