Many retirees express regret about not starting their savings earlier, according to Ric Edelman, a retirement expert and founder of The Digital Assets Council of Financial Professionals. Edelman shared his insights on this topic during an interview with TheStreet.
Edelman emphasized that a prevalent regret among retirees is having not initiated their savings plans during their 20s. Lack of early savings is a significant concern for many individuals approaching retirement.
For those nearing retirement and feeling unprepared, Edelman advised a few critical steps. Firstly, individuals may need to extend their working years beyond their initial plans. Secondly, there is a necessity to increase their savings contributions, despite the challenge of potentially affording these additional savings. Another option might involve reducing expenses, which could include drastic measures such as selling and downsizing their homes, though this is often unappealing. Lastly, Edelman mentioned a rarely considered option of shortening life expectancy, noting its impracticality and discomfort.
Edelman underlined the importance of continued investment in financial markets to achieve meaningful returns. Simply placing savings in a low-interest bank account would not suffice for meeting retirement goals.
Regarding the impact of cost-of-living adjustments, Edelman acknowledged that inflation is an inevitable factor. The recent years have seen severe inflation, with lasting high prices. Consequently, retirees’ money must outpace the cost of living. Evaluating returns across various asset classes, including stocks, bonds, real estate, and others, is essential. Additionally, considering the impact of taxes is crucial as they are likely to rise in the future, intensifying the challenge of achieving a real rate of return.
Edelman concluded that overcoming the combined effects of inflation and taxation is necessary for securing a stable financial future in retirement, although it undeniably presents significant challenges.
