Work is a major part of our lives. From the moment we reach adulthood (and sometimes even before adulthood), most of us find a job and we work for the next 40 or 50 years until it’s time to retire. Retirement is thought to be a reward for working hard during all of those years. We accumulate savings so we can enjoy those final chapters in our lives without having to worry about money, as for the average person, money is a daily concern.
Perhaps, retirement savings should be as easy as putting away a percentage of our income into a savings fund and then collecting small increments of this savings once we retire — up the mountain and then back down. It’s not exactly that simple. Tax legislation, the various types of retirement accounts, contribution limits, Social Security laws, and pricey medical care make this simple concept — save now so we can enjoy retirement later — much more complicated.
Since we have so many factors to consider — all of which have a role in determining how well we save, the return we earn, and how well we maximize and preserve our money — we try to make the best decisions possible. Lincoln Financial Group conducted a study on the underrated impact of taxes on retirement. In the 2013 study, Lincoln examined the habits, knowledge, and behaviors of individuals between the ages of 62 and 75 with incomes in excess of $100,000.
Using data from the Lincoln Group study, we found a few common must-haves that appear to be missing from a high percentage of retirement plans.