So you would like to retire… but don’t feel that you’re able to at the present time. For most people, a successful retirement requires advance planning, good life choices and careful thought about retirement lifestyle. Unfortunately, the following six roadblocks can and do cause many individuals to postpone retirement, even when they are otherwise ready.
1. Lack Of Planning: Over the years, careful planning can strategically enhance your chances of a successful retirement. Unfortunately many families wait until after their children are out of the house to begin focusing on their retirement goals. In the worst-case scenario, they haven’t even participated in their company-sponsored retirement plan or even an individual IRA. If you wait until you’re in your 50’s to start the process, it is definitely going to have a detrimental effect on your plan.
2. Young Children: Another roadblock for many pre-retirees today, is that they waited until later in life to begin having children. Now that they are in their late 50s or early 60s, they still have children in high school or college and feel the need to continue working until these children graduate and start their own careers. This is also a growing concern for many couples that are in their second or third marriages with children from each.
3. “Boomerang” Children: One of today’s most publicized roadblocks is the phenomenon known as boomerang children. With the rise in unemployment and increased college debt loads, many children are moving back in with their parents after they graduate. In many cases, even after they begin a successful career, their finances are in disarray, they need time to recover and get back on their feet.
As a parent, we all want to help our children succeed. Unfortunately, this means that we are bearing the burden of additional living expenses while our children return home. This can further delay and detrimentally affect even the best of retirement planning.
4. Poor Stock Markets: The increased volatility in today’s US and world stock markets has caused many individuals to see their retirement nest eggs and 401(k)s either drop in value or move sideways. This negative uncertainty about future growth has made many individuals that would like to retire, second-guess their decision.
To add further complication to the matter, many corporations are cutting back on retirement plan matching programs as well as other benefit programs. These cutbacks, along with corporate layoffs due to the bad economy and a bad stock market, have caused potential retirees to put their plans on hold. This uncertainty has caused them to take a much more thorough look at inflation and other retirement lifestyle choices, before they go.
5. The Three D’s: Death, Disability or Divorce: These three items cause many individuals to avoid even thinking about retirement. Unless the surviving spouse received a substantial life insurance settlement after the death of a loved one, they often believe they will have to work forever before they can retire.
In the event of disability, many families are forced to make financial cutbacks in order to make ends meet. In addition to the financial strains on the family, most disabilities also include some medical issues. These factors add stress to the situation and lead many families into a state of avoidance.
Divorce offers a completely new set of complications. There could be multiple families with multiple children and a wide variety of other financial implications. With divorce rates in the United States at about 50%, the financial impact on retirement planning can be devastating. In most cases, retirement assets are divided in half and many non-working spouses are forced to reenter the job market. Not to mention the legal expenses that both sides incur as they negotiate what they believe is a fair settlement.
6. Health Insurance Costs: As many companies are looking for ways to save money, health insurance benefits in retirement are being dramatically affected. Years ago, many companies paid the entire cost for their retirees. Today… most retirees have to pay the entire cost of their own health insurance. With the rising cost of medical care, this can add $10,000 on up to $20,000 annually to their budget. While in some areas of the country, Medicare Part B coverages have become more reasonable, providing adequate health insurance coverage remains a growing concern for most retirees.
Summary: While many of these roadblocks can be successfully handled with proper planning, the unfortunate reality is that sometimes the unexpected happens. No one can successfully predict the stock market from year to year, nor can anyone guarantee your date of death or that you won’t become disabled.
No matter which of these roadblocks causes a bump in your road to retirement, it is always better to start early, invest often and live beneath your means. If you haven’t already begun the process… today is a great time to start.