Overcoming the Challenges of Retirement Planning

Planning for retirement is an intricate and daunting task that poses numerous challenges for individuals. Approximately 100  million Americans are covered by a contribution retirement plan. Currently, retirement plans hold around $11 trillion. So, while this seems a lot, the real question is: Is it even enough? 

The answer may surprise you: It isn’t. Indeed, retirement plan balance is high for older generations, while younger generations do not have sufficient funds in their plans yet. Additionally, even for older generations such as Boomers, the average balance barely reaches $210k, which is far from being enough to retire comfortably. 

Additionally, only 70% of private companies workers have access to a retirement plan, and only half of those use the contribution plan available.  

It is worth noting that countless Americans rely solely on accessing a retirement plan to prepare for their financial future. In reality, this approach is ineffective, and the population that doesn’t get access to contribution plans are not necessarily worse prepared for the future. In fact, if anything, they have, at least, the opportunity to plan and consider how to secure funds for their old age. 

So, the first step, perhaps in planning your retirement, is understanding the many options to save and plan for your retirement. The bottom line: There’s more than contribution plans to pave the way to your retirement years. 

The importance of making a retirement plan

You can’t consider your future without creating a comprehensive retirement plan that will address your fundamental needs about your financial future. Retirement plans differ from one person to the other. Therefore, your priority is to determine how much money you will need in retirement to  maintain your desired (and current) lifestyle. This will need to take significant factors into consideration, including healthcare costs, unexpected expenses in old age, and inflation. 

Additionally, you will also need to decide when you want to retire, and evaluate whether it is a feasible goal, based on your current financial situation. This should also help you figure out whether you need to make changes to your current financial plans to achieve your future needs. 

The importance of working with an investment manager

Retirement planning involves negotiating the complexities of investment options, market volatility, and risk management. Many individuals planning for retirement come to the realization that their savings will not be sufficient. As such, to establish a financial plan that will support you in your later years, you want to work with a seasoned investment manager. Investment specialists can bring their expertise in financial analysis to provide the guidance you need for your short- and long-term goals based on your retirement objectives and your risk tolerance. 

Investment experts have a deeper understanding of financial markets, which means they are ideally positioned to recommend diverse investment instruments and approaches to build a balanced portfolio. 

There is no denying that planning for retirement is a formidable task that everyone must undertale to secure a stable future. The key learning is that you can’t afford to rely solely on your employer’s retirement plans. Individuals must take an active role in managing, planning, and securing their retirement funds. 

That being said, challenges are still here. But the first, and most important approach, is to realize that you can’t make it happen without a plan and an investment strategy.

FUNDRISE | Real Estate Investing

About Kamilah

My name is Kamilah and I am a native New Yorker of Caribbean descent who is passionate about helping you learn how to invest and build your net worth by sharing easy-to-follow YouTube tutorials that will help you take control of your money and set you up for financial success. But this wasn’t always my story.

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