Are Your Savings on Track for Retirement

Are your savings on track for retirement? Many consumers do not even give it a seconds thought until they suddenly find themselves being pushed out of their jobs early due to downsizing, layoffs or even company bankruptcy. Whatever the reason, consumers should really consider protecting themselves and complete an assessment of whether their savings are on track for their retirement.

Start with the assessment of what you can expect from your company when you retire. If you are lucky enough to have a company pension plan, most will provide an estimate of what you can expect in terms of income at various stages of retirement. Next assess your savings now, how much you expect to add to your savings until retirement and how much you expect your savings to grow based on your investment strategy. Most people will assume that they can take 4% of the total savings at retirement each year. This will give them an 80% chance of their savings lasting throughout their retirement.

Are Your Savings on Track for Retirement – Risk Assessment

Once you have your basic plan as mentioned above, you now can decide if you have sufficient funds in your savings and whether you are saving enough for retirement. Perhaps you will need to increase your savings to ensure that you have enough money at retirement to live in the manner that you would like.

The next step is to complete a risk assessment. Ask yourself the following questions. Assess the probability of these situations developing in your specific case. Develop plans to help deal with the situation. For example, what would happen to your retirement plan if your company laid you off early,. Or perhaps downsized you or worse went bankrupt taking your retirement plan with it?

Another question concerns your savings. Are you invested diversely. In other words do you have all of your investments in one company. Have you spread it around to manage your investment risk? Some consumers have placed all of  their savings with one stock only to have the stock crash and they are left with nothing.

Practice diverse investing to avoid this risk. Once you have completed your risk assessment, develop plans to deal with the risk. Evaluate your plan once a year at the minimum to take into account any changes in your life. Which ones should you  consider to achieve your retirement dreams.

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