You’ve probably heard this before from your financial advisor: “Just reach your magic wealth number, then you’re all set for retirement, you’ll have nothing to worry about.” Then off you went back to work, day in and day out, to hit that magic number, knowing that if you reached it, you’d have nothing to worry about. The assumption is that you only have to put a lump sum of your earnings aside and you’ll be fine. Boy, if that was the only goal you needed to achieve, confidence in your retirement, that would be great…unfortunately it’s probably not. As you probably know, the world has changed dramatically in the last few years, completely changing the rules of ways to retire -- without having to worry financially. When you’re working, you’re getting a paycheck. Making good money does not necessarily translate into a confident retirement. The real challenge comes when you retire and need to find ways to turn that lump sum into a steady income. Without professional help, you may be unsure of the steps to turn that lump sum into a steady, recurring income that will last the rest of your life.
You may, hopefully, live at least another 30 years or more, so your priority should be to create a new retirement plan that creates what I call a margin of preservation, so taxes, world events, the stock market and other nasty surprises don’t steal a big chunk of your wealth – cutting into your cash flow, draining your hard-earned capital.
Here are three blind spots you may need to know to help avoid continuing to work and not being able to retire with confidence:
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