A combination of longer life expectancies and woefully inadequate retirement savings might put many baby boomers in a bind during their golden years. That could leave them turning to their children for financial assistance.
Do you need to try a better approach to accumulating retirement savings? Here are 10 signs that if you don’t change your savings habits, you might require help to get through retirement.
1. You Do Not Have a True Investment Plan
If you are relying on growth in your portfolio to reach retirement goals, rethink your financial plan, said Kirk Chisholm, a financial advisor and principal at IAG Wealth Management in Lexington, Mass. Individual investors are notoriously bad at making investment decisions.
The financial services market research company Dalbar studied investor performance from 1984 to 2014. During that 30-year period, investors underperformed the S&P 500 by 7.42% annually, earning an annual return of just 3.69%, Chisholm said.
“Investors may blame the market, their financial advisor or just bad luck, but the reality is that most investors don’t have a plan,” he said. Too many investors gamble with investments by looking for a quick big-return trade, while others “buy and hope” with investments, he said.
To be successful, you need to assess your own investor psychology and find an investment strategy that works for you. “This is where having an investment plan is important,” Chisholm said.