Retirement Issues to Be Aware of This Year

Article excerpt

I find that retirement has different meanings for different people. For some, it will be a time to travel and see parts of the world they have never seen before.

For others, it will be spending time with grandchildren and family members, or even time to start a new business.

Regardless of what retirement means to you, there are things you need to be aware of. I have listed a few for you to take note of:

1. Failing to take inflation into account. This can be troubling if you are relying on a pension that is not indexed to inflation (and most are not). Most of my retired clients have seen their expenses double during the course of their retirement. Do you know how you will grow your retirement income to offset the negative impact of inflation?

2. Some retirees spend their retirement assets too quickly, others spend it too slowly. I don't know which is worse. Outliving your money, or skimping and saving during your retirement years when you don't need to. Most of us would take the latter, but why not consider the amount you can spend during retirement so you can enjoy more of it while you are alive.

3. You need to grow your retirement assets. Centenarians, those over age 100, are the fastest-growing demographic group in the U.S., according to the U.S. Census Bureau Special Report 2010 (and more than 80 percent of centenarians were women). Do you know if you have (or will have) enough retirement assets to cover this cost?

4. Putting all your eggs in one basket. Although diversification can limit returns during good times, it often helps to preserve your retirement assets when things go south. Often, retirees will have a concentration in one or more company stocks. This can be a problem if the company ever finds itself in trouble. …