A retirement plan is important to your business — and to all the employees relying on it for income later in life. However, mistakes and confusion can turn retirement plans from an attractive benefit into a liability.
Most people couldn’t bear the financial hardships resulting from unexpected events, such as a major house fire, a car accident, a disability or the premature death of a family breadwinner, which is why one of the most important component of a sound financial plan should be your personal risk management strategy.
It’s important to conduct regular check-ups on your retirement plan to make sure you are on track in working towards your retirement goals. Below are a few questions to ask yourself, at least annually, to see if (and how) they affect your retirement planning.
1. Review the Past Year
Did you receive a raise or inheritance?
An increasing number of Americans are facing an uphill battle just trying to save enough and earn enough on their savings to be able to retire on time.
The saving versus paying off debt is an age-old quandary that has plagued people since the advent of consumer debt. Pose this question to a group of financial planners and the responses will be split, roughly down the middle. While there might be as many advocates for savings as there would be for paying down debt, the broad consensus will likely be that it really depends on the situation.
If you have read any literature on retirement planning or have received advice from a financial professional, chances are you were presented with the 70% rule, the one that suggests that retirees will need between 70 and 80% of their pre-retirement income in order to maintain their standard of living.