When You Don’t Get To Retire

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(KTVI) - You can save all you want for retirement, but there are still things that can prevent you from retiring. Peggy Knobbe is a financial advisor from Wamhoff Financial Planning and Accounting Services, and has some good advice.

Mistake 1: Not Having Access to Health Insurance

•             When many people retire, they may not yet be of age to qualify for Medicare. Cobra will cover those people for 18 months, but at the end of that time, they`re left with no health insurance, and may not have planned for the cost of health insurance in their retirement savings.

•             Obamacare helps to fill this gap, but we`re still not sure where all the provisions will end up.

•             The cost of healthcare is higher than you may think. A recent study revealed that the average 65 year old couple, retiring this year, would need $300,000 to cover out-of-pocket health care costs, yet the average total amount in a savings or retirement plan is just under $200,000.

•             This disparity keeps many from being able to retire.

•             Advice to avoid this: as you`re saving for retirement, keep health care costs in mind and plan for those out-of-pocket expenses just as you`d plan for ordinary living expenses.

Mistake 2: Not Saving Enough, or Believing You Don`t Have Enough

•             Recent studies have shown that a growing number of retirees don`t have enough money to cover their basic living expenses.

•             Many people don`t have a solid grasp on how much money they will need in retirement. A professional can help determine what the individual will need to save to retire.

•             Not knowing how much you need in retirement also causes people to have a false belief that they don`t have enough. There is fear that regardless of what they have, it won`t be enough. Again, a professional can help you determine what you need, and create a plan for dispersing and investing funds in retirement.

Mistake 3: Not Knowing How to Diversify Investable Assets

•             When people start reaching retirement age, they begin moving towards what they consider to be 'safe' investments. Not only do these investments bring a low rate of return, but they`re also not diversified - so all your eggs end up in one basket.

•             Lack of diversification, meaning investments that are in the market and outside the market, such as Real Estate Investment Trusts, Oil and Gas, etc., puts the investor at risk of not getting enough return. Lack of return, and lack of income upon retirement, can keep people from retiring.

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