Retirement Killers are Hard to Avoid (Part Two)

Retirement Killers are Hard to Avoid (Part Two)

We all know that creating the perfect nest egg for retirement is no easy task…

And recently we went over a Retirement Killing habit people trying to save often fall into.

Today, as promised, we have 2 more Retirement Killers that will serve as learning tools for your future saving endeavors. Click here if you missed part one.

Let’s jump right in…

Retirement Killer #2:

Not Having an Unassailable Wealth Fortress

The cold fact about the markets is this — sometimes they come down.

During a recession, folks can lose as much as 57% of their wealth — like what happened in 2007.

Talk about a killing blow to your retirement plans!

That’s why sometimes investors can suffer from being too passive about their nest egg:

  1. When they ignore tell-tale warning signs that it may be time to cash out of certain positions…
  1. When they don’t hold enough recession-proof assets to get them through a pinch…
  1. Or when they don’t have a solid enough stream of retirement income to get by on during hard times!

But a market crash is just one of many things that eat up your wealth when you’re retired or preparing to.

Unexpected medical expenses, natural disasters, loss of a job or income… all of these events can severely harm your plans for the future.

And they’re more common than you think.

Finally, there’s inflation to think about too.

Inflation is the rate at which your purchasing power decreases. In other words…

As inflation grows, your savings shrink. That’s what happens when a country borrows way more money than it could ever pay back. The official numbers in 2018 were 2.9%1, but there are reasons to believe the “real” rates were even higher.

That’s why most folks should make sure they’re taking action to save and invest enough of their wealth before they retire — and make sure they’re out-earning the rate inflation takes away.

The good news is, if you started too late or saved too little (like most Americans)… There are ways to catch up.

Retirement Killer #2, solved!

Retirement Killer #3:

Not Having Enough Sources of Income

It’s been said over and over: Millionaires have an average of 7 different sources of income.

Even if you think you might be covered by Social Security or a pension down the line, it’s ALWAYS safer to have more.

Especially when you consider state pension funding is at a historic low2 and that Social Security is utterly unsustainable as it stands now.

Finally, if you read Retirement Killer #2, I told you about how inflation can eat at your wealth over time, making it important to earn MORE on your savings than inflation takes away.

Making sure your investments earn an income is one of the best ways to beat inflation. Income is generally more reliable than capital gains and taxed at a lower rate.

So, what are your options?

Well, you can either work more for more money…

Or you can make your money work for you!

That’s how income investing works: You leverage the wealth you have to provide income over time.

There are tons of avenues for investments to make you an income.

Popular examples are rental properties, bonds, peer-to-peer lending, and dividends.

Dividends are are a great way to generate income because they’re usually a good sign of a company with a strong foundation.

Reliable dividend-paying companies might not be your ticket to fast riches, but they make for an excellent place to store your money and get paid for doing so.

Especially when dividends can pay MUCH more than the interest you gain for storing your money in a bank3:

That’s why many experts recommend dividends.

And as I mentioned in Retirement Killer #2, we’re facing an unprecedented opportunity for select dividend-paying stocks.

After recent tax cuts, dividends could increase as profitable companies pass the savings onto their shareholders.

But, you can always be sure that I’ll be on the lookout for other income opportunities for my subscribers.

I highly recommend you keep an eye out for those weekly newsletters.

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So there you have it — everything you need to know about Retirement Killers and what you can do right now to avoid them.

Remember that investing inherently carries risk, so never invest money you can’t afford to lose. Always pay close attention to what’s happening with your investments.

With Purpose,

Patrick Gentempo

Patrick Gentempo