Americans are, by reputation, irrepressibly optimistic. It's clear, however, they need to get real when it comes to retirement planning. A recent Ameriprise Financial survey found that two out of three respondents say the road to retirement has been "smooth" — despite the market downturn, real estate collapse and high joblessness that marked the Great Recession.
Ameriprise's study identifed a range of retirement "derailers," events that can often set us back by thousands, if not tens of thousands, of dollars.
According to Ameriprise, 10 of these derailers stand out as the most prevalent — and damaging:
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1. Supporting one or more grown children or grandchildren.
Your love for them knows no bounds but dip into your nest egg too often or for too long, and it'll break the bank.
2. Receiving pension benefits that are lower than expected, or not getting an anticipated pension at all. Does anyone in America still get a pension? Well, yes, though it's becoming a perk of the past. The 2008 stock market meltdown and low interest rates since haven't helped the pension funds that do remain.
3. Losing some retirement savings because of unsuccessful investments. Does this really need any further elaboration? Just remember: diversification and rebalancing definitely help. As does keeping your emotions in check.
4. Taking Social Security benefits before reaching full retirement age. Just because you can start collecting at 62 doesn't mean you should.
5. Experiencing job loss. This is hardly ever fun but, as Amerprise will remind you, can be really harmful to your retirement savings if you to pull money out to make ends meet.
6. Not getting an anticipated inheritance. Kinda brings to mind the old Stones song, right? You don't always get what you want …
7. Having to spend a lot of money on home repairs. It's never a bad idea to have a few bucks stashed elsewhere for this sort of thing.
8. Taking care of an aging parent or other family member. People are living longer than ever, which means expensive long-term care needs, such as a nursing home or other assisted-living arrangement.
9. Paying for significant medical bills that aren't covered by insurance. Best to avoid this at all costs. Stay healthy!
10. Using retirement savings to pay the bills. This is perhaps the worst-case scenario but, unfortunately, it's not so uncommon, according to the Ameriprise survey.
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