What kind of blind spots should you look out for when it comes to your financial plan? We talk about four key areas that often get overlooked when retirement planning.
(Click the featured times below to jump forward in the episode)
We all have blind spots in life, and that includes our financial plan, too. What has Eric seen as a financial advisor when it comes to clients and their blind spots?
A market downturn could really wreak havoc on your financial plan, depending on the timing of it. How much of your money is at risk as you retire? If you’re starting in a deep hole, you can never quite recover. It’s important to stress test your portfolio against that possibility.
We all know inflation exists but we just don’t pay attention to it enough. When you’re working, you’re getting raises and don’t notice the cost of living going up as much. When you’re on a fixed income in retirement, you will feel the impact if you don’t have enough savings to cover that.
Medical expenses continue to rise even faster than inflation. If you want to retire early, one of the biggest hurdles is medical insurance. You need a plan for possible nursing home needs or what happens to your spouse if you pass away. Instead of avoiding this conversation, be sure to talk it over with your financial advisor.
Likewise, tax increases are headed your way. Taxes are a sure thing, but how much they will cost is unknown. Moving more of your money into a tax-free bucket will make a big difference in retirement. Taking the tax hit now while they are lower can really pay off in the future. Talk to your advisor about all of these areas to make sure you avoid the blind spots when planning for your retirement.
Listen to the entire episode or skip ahead using the timestamps below.
[1:08] – The danger of a downturn.
[5:18] – Inflation is a big blind spot.
[6:54] – Medical costs keep rising.
[8:59] – Tax increases are inevitable.
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