Chief Wealth Officer, Jessi Chadd, CFP®, CeFT® was quoted in an article from Go Banking Rates that identifies major problems that can derail retirement plans.
“A serious red flag when it comes to a proper retirement plan is keeping all your savings in tax-deferred accounts, such as IRAs, 401(k) [plans] or 403(b) [plans],”
Jessi, an advocate for Retiring WELL, explains that investing solely in accounts that are tax deferred puts people in a position where every dollar withdrawn in retirement is taxed. It is equally important to build up after tax savings in ROTH IRAs, brokerage investment accounts, and high interest savings. This is even more important for someone retiring before age 59.5, which is becoming more common with the FIRE movement – financial independence retire early.
In addition, Jessi says the other mistake she sees most often, is people assuming that because they have worked 40 years, they deserve to retire regardless of how much they have saved. Years worked does not equal a successful retirement.
Successful retirements require adequate savings and planning. It means having enough money to live the life you want throughout your retirement years.
A sustainable retirement is not a guarantee just because you put in the years at work. This is a big shift in thinking for the baby boomer generation – because they saw their parents retire with healthy pensions as a result of years with the same company. Those days are gone. Saving for retirement is the responsibility of each of us, not our employer.
Read the full article on GoBankingRates.com.
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