Our Promise to Readers
GOBankingRates’ team is passionate about delivering unbiased insights and information. Through a data-driven approach, we evaluate financial services and products fairly, free from advertiser influence. Learn more about our editorial guidelines and our product review methods.
20 Years
Helping You Live Richer
Trusted by
Millions of Readers
Approaching retirement is an exciting chapter, yet financial readiness is crucial. Personal finance expert George Kamel offers invaluable insights that can save retirees from financial disaster. By incorporating his advice, individuals can solidify their financial future, regardless of their current financial state. Below are four essential strategies shared by George Kamel to help retirees prevent financial setbacks.
4 Secrets of the Truly Wealthy, According To Dave Ramsey
4 Things You Must Do When Your Savings Reach $50,000
Thinking Beyond Social Security
George Kamel emphasizes that planning to rely solely on Social Security during retirement is inadequate. While Social Security can provide a financial cushion, it often falls short in sustaining one’s pre-retirement lifestyle. Notably, the Social Security Administration estimates average benefits of $1,976 per month, translating to an annual $23,712. Consequently, calculating your needed retirement savings allows better goal setting, ensuring you save adequately each month and determine a feasible retirement age.
Building Sufficient Retirement Savings
Underestimating the necessary retirement savings is common. To rectify this, retirees must assess potential retirement expenditures, setting monthly savings targets accordingly. In a Facebook post, Kamel highlights that with an 11% return, saving $1,160 monthly starting at age 50 can accumulate $1 million by age 70. This is in line with the historical 11% average annual return of the S&P over 30 years.
Diversifying Your Investment Portfolio
Diversification is key in safeguarding retirement funds. Kamel emphasizes the importance of balancing investments across various assets due to market unpredictability. His strategy includes allocating 25% of funds into four mutual fund types: growth and income, growth, aggressive growth, and international funds. Following this diversification strategy, aligned with Dave Ramsey, can significantly stabilize and fortify retirement portfolios.
The Choice of When to Retire
While early retirement can be enticing, it may inflict financial setbacks. Kamel advises against withdrawing from retirement accounts before age 59½ to avoid penalties and forfeiting compound interest benefits. For example, by investing 15% of a $71,000 household income from age 35, one could secure $2.5 million by age 67, assuming a 10% return rate and no employer match. In contrast, retiring at 62 reduces this to under $1.5 million, showcasing the financial reward of working longer.
Click Here For More Personal Finance tips and strategies.
Discover more from Make Money Online and Work From Anywhere
Subscribe to get the latest posts sent to your email.
