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No one wants to end up broke inretirement.
Even those who think they have enough may be in for a rude awakening.
Consider the following reasonsyour nest egg may need more padding before you call the job quits.
Politicians love to spend today and let someone else worry about the bill tomorrow.
That could mean higher rates on existing types of taxes, such as income taxes.
Or it could mean the government creating new types of taxes to add to our existing tax burden.
While large pre-tax retirement accounts certainly help, they come with large income tax bills upon distribution.
Inflation: The Silent Tax
When governments get into trouble paying their debts, most dont default.
They simply let inflation run rampant and reduce the value of their debts.
As weve seen especially in recent years, inflation can make everyday purchases far more expensive over time.
Even a healthy inflation rate saps yoursavingswhen you plan in decades.
Tomorrows dollar wont stretch as far as you think, so invest more than you think you need.
Longer Than Expected Longevity
We all assume well live a roughly average lifespan.
But life expectancies form a bell curve and plenty of people fall on the right-hand side of it.
Many people underestimate how long they might live, observes Buckingham.
And that risk is even higher for a married couple.
Thats 25-30 years, or more, in retirement!
Unexpected healthcare and long-term care costs can and often do crop up, add Kullberg.
And when they do, they have a significant impact on retirement savings.
Underperforming Investments
Youve read it a hundred times: past performance does not guarantee future results.
The 4% Rule forsafe withdrawal ratesis based on past stock and bond markets performance.
But whos to say that the stock market will keep generating similar returns in future decades?
Low birth rates and slowing population growth may rob financial markets of momentum.
Save more than you think youll need for retirement.
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