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How To Better Prepare For "Retirement Derailers"

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Life's twists and turns can knock your retirement savings off track, and NY1's Money Matters report looks at some of the common culprits and what you can do to better prepare for them. NY1's Tara Lynn Wagner filed the following report.

Even the most dedicated savers may find themselves hitting a few bumps on the road to retirement planning. Ameriprise Financial calls these bumps "retirement derailers".

"Ninety percent of our respondents said that they'd experienced at least one of these kind of derailer events," says Suzanna de Baca of Ameriprise Financial.

On average, they'd experienced four.

The company's analysts recently looked at individuals between the ages of 50 and 70 who have squirreled away more than $100,000. When asked what the derailments cost them, the average answer, according to de Baca, was $117,000.

"So a six-figure number of lost retirement savings, that's pretty significant," de Baca says.

The most common derailers reported were tied to the weak economy. Two-thirds of those surveyed cited low interest rates. More than half suffered market losses, and one-third saw their home equity fizzle with the housing market.

"A lot of individuals have been relying on their home equity as an asset that they could tap into for retirement," de Baca says.

Those types of derailers may be beyond one's control, but looking back, participants also saw a lot of setbacks that were of their own making.

One-third of those asked said they should have better controlled their spending, maybe eating out less or taking fewer vacations, while 25 percent wished they'd been more careful about using credit cards. But one regret emerged as the most common refrain:

"57 percent of respondents said, 'I wish I would have started saving earlier,'" de Baca says. "So the note to the younger generation is, start socking it away."

As vice president of wealth strategies, de Baca advises people to think about how they'd like to retire, how much money they'll need to finance that lifestyle, and then save even more. That extra padding, she says, will act as a shock absorber when you come across those unavoidable bumps.

"Something is probably going to happen, even if you can't predict what, but you can plan for it," she says. "You can sit down with a financial planner. You can factor those unknowns. A little fudge factor into your financial plan is shown to actually make people feel more confident, prepared."

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