By Elizabeth Rogers, 50Plus.com
Who said retirement planning was easy? Thanks to a perfect storm of factors -- including a wallop from the economy -- more people worry their retirement plan won't cut it. In fact, 60 percent of people over the age of 45 fear outliving their assets more than they fear death, according to a poll from Allianz Life Insurance Group. No one wants to face poverty or become a burden to their family.
While we can't predict the future, we can plan for it. Here are some tips to keep your retirement plan on track:
1. Know your number. Many people don't know how much they'll need for a comfortable retirement, making it difficult to plan. Start crunching some numbers, and seek the help of an expert if needed. Online tools like Service Canadas Canadian Retirement Income Calculator or AARPs Retirement Nest Egg Calculator can help.
2. Plan for spending. We're often so busy worrying about retirement savings that we forget the next step: a post-retirement income management plan. How can you make your assets last? What expenses do you anticipate, and what activities (like travel and hobbies) should you include?
3. Expect the unexpected. A job loss, chronic illness or accident can disrupt even the best made plans. Does your retirement plan include emergencies? Don't be afraid to ask "what if?" -- and come up with some answers.
4. Go for check-ups. It's tempting to ignore those statements, but experts advise to review your plan and portfolio on a regular basis. That way you can pin point weaknesses and make adjustments accordingly -- and avoid paying unnecessary fees.
5. Earn a little extra. Need to boost those savings? Make it a goal to get a raise, start a side business or earn a little extra income. It doesn't have to be a huge commitment: try selling your unwanted stuff online or looking for the occasional freelance opportunity.
6. Avoid lifestyle inflation. When you earn more, save more -- and avoid the trap of spending more. Set aside a portion of any bonuses, raises or extra income to support your future. Pay yourself first with automatic transfers to a savings account or RRSP and you won't miss the money.
7. Steer clear of debt. Earn interest, don't pay it. Spiralling debts can be a drain on retirement savings and future income, especially with more baby boomers carrying a mortgage into retirement. Try to pay down your debts -- especially high-interest ones-- and spend within your means.
8. Balance your priorities. Studies show that baby boomers often put the needs of their parents, children and even grandchildren ahead of their own. However, maintaining your financial stability is also a gift to your family so don't be afraid to put your needs first.
9. Work longer. Putting retirement on hold has become a necessity for many people, but it's also a solid strategy. Staying in the workforce means more years to save and fewer years of drawing on your retirement income. You don't have to keep your full time job indefinitely -- take the opportunity to explore part time work or a new business venture.
10. Look after yourself. What does good health have to do with finances? A lot, actually. No one wants to cut short a career during the prime earning years, or incur hefty health costs rather than enjoying retirement. Making time to eat well, exercise, reduce stress and spend time loved ones is also a worthy investment.
Article courtesy of 50Plus.com, Canadas leading Internet portal for boomers, Zoomers, 50+ and retired people everywhere. By Elizabeth Rogers