By Joan Lee
on April 18, 2020
Read in 2 min

People used to feel that they were safe in retirement. Social security and loving children used to be all people felt they needed. However, social security is looking less viable day after day. People are working beyond the typical age of retirement. Their children are struggling to make ends meet let alone support their retired parents. With this in mind, here are five ways people can prepare for retirement.

Foster Multiple Sources of Income

Despite the drawbacks discussed earlier, Social Security is still a valuable part of this plan. To be safe however, more sources of income should be developed. 401k plans can be a lifesaver. Many employers will even match your input up to a certain amount, so be sure to check your company policy. Also, place money into savings accounts and annuities. Sometimes your financial situation may be too tough to save money but setting money aside should always be the goal.

Involve your Family

When someone retires, that decision affects everyone in the immediate family. You should sit down with your loved ones and discuss your plans. It may be a difficult subject to bring up, but it is necessary.

If you are looking to retire, and you expect help from your children, you should talk it over with them. The family should work out a plan or at least be on the same page. Everyone can prepare and plan together.

Make Sure You Consider Market Crashes

When the 2008 financial crisis hit the U.S., a lot of retirees lost out big. Crashes and booms in the economy are infrequent but normal parts of living. Regardless of how the economy is performing in the present, there may be no telling what will be going on 20 or 30 years from now.

Experts often recommend annuities. They are a great way to invest while not being left vulnerable during market crashes. Annuities are dependable regardless of the state of the economy.

An Uncertain Future

It is normal to have expectations in mind for how the future will play out. Many things can change unexpectedly throughout your lifetime. Laws can change. Certain career paths can become more or less viable. Health problems can crop up.

Of course, you can’t live in constant fear. You should be prepared though. Possibly the best way to prepare yourself is to consult with a financial advisor. Together, you can come up with a plan and some tactics to face the future.

Determine Your Future Standard of Living

This seems obvious, but people often underestimate how much money they need to retire comfortably. You should consider a litany of variables that may affect you. 

Will you have your house paid off by then? Will you be purchasing a new car every 5 years? How much will daily expenses add up? These are all questions that must be answered in order to know how much money you need to save.

This is not legal, financial, or professional advice. Please consult a legal, financial, or professional advisor for your specific situation.