Everyone agrees that saving for retirement is an important step in life. Have you been saving enough so that once you’re at retirement age, you can stop working?

Many people unfortunately have been mislead or misinformed when it comes to saving for retirement.

They don’t understand how much they should be saving, how to invest, or how to stretch their money. Here are 10 ways in which Americans lack an understanding in saving for their retirement:

• Not saving enough. Many people haven’t attempted to “budget” how much money they will need to retire.

• Being unaware of when retirement will happen. Lots of workers need to retire before they expect to, and before they are ready.

• Staying alive! Life expectancy is a very limited planning tool. Some workers will live beyond what they factor in, thereby outliving their savings.

• Ignoring long term care. So many people decide they won’t need long term care, but as you grow older, your chances for needing long term care rise. Adding in the cost is important.

• Failing to understand investments. Workers are now largely responsible for managing investments for retirement; however, many workers misunderstand investment returns and expenses.

• Trying to insure themselves against long life. Although many people find guaranteed lifetime income attractive, in practice they usually choose to receive retirement plan benefits in lump-sum form. They pass up opportunities to get a lifetime pension or annuity, failing to recognize the difficulty of self-insuring their longevity.

• Taking bad advice. Many workers take poor advice from financial “professionals.” If it sounds fishy, get a second opinion, or even a third.

• Not knowing sources of retirement income. Workers often don’t understand what their main sources of income will be in retirement. They may be surprised and disappointed when they try to live on the income that is actually available.

• Not considering inflation. Many workers forget completely about factoring in inflation.

• Failing to provide for a surviving spouse. Many married couples fail to plan for the eventual death of one spouse before the other.

Considering these common misconceptions is a vital first step. If you recognize yourself in any of these scenarios, it may be time to take action.

Have more questions? For more information on retirement plan administration, contact us today. We’re the Braley & Wellington Insurance Agency, based in Worcester, Massachusetts.