Over the next 365 days, policymakers–at both the state and federal levels–have the potential to shape retirement for many for decades to come. Some such policy opportunities may be straightforward in impact while others may be more subtle and long-term. For example, how politicians and regulators go about handling any current economic issues could have affects on how people save currently as well as what future retirement costs may be. Another example might be whether a more liberal-leaning House of Representatives combined with similarly-situated state legislatures may turn their sights on programs such as Social Security and Medicare and look to shore up such programs so that they can continue to serve current and future generations. On the flip side, other legislatures with more conservative leanings may seek to cut into such programs, which may lead to higher future retirement costs and expenses. However, one area that there seems to be bipartisanship is expanding opportunities for American workers to save for retirement through the use of employer retirement accounts. Much of these efforts have focused on opening doors for small businesses to offer retirement savings accounts to employees that were in the past considered to costly for such employers. These are just a few of the ways that politicians and policymakers could impact retirement for you and those of younger generations. This post is also intended to encourage you to remain knowledgeable as to what is happening in both state and national legislatures and to understand how policies may impact you so that you can make the best decisions regarding your finances and retirement plans.
This is not a political piece, so don’t worry. What I am going to talk about is being conservative when it comes to saving for retirement. Saving for retirement is a balancing act with the focus being on saving the “right amount” for your post-working life. What constitutes a “right amount” varies from person to person. Regardless of what you’re amount is, you probably should plan to save more than you intended. This is where being conservative comes in. In the retirement savings context, being conservative means that you are cautious and are building in some leeway with your savings so that if expenditures in retirement turn out to be a bit more than expected, you still have the resources to cover them. This version of conservative also means that you are building in some room in your savings for market flexibility should your retirement savings and investments take a minor hit or have to whether a downturn. There is no percentage or number of extra money you have to save, but rather you should consider adding enough to your estimates to keep them realistic and which you are comfortable with. This may mean saving an extra $10,000 for some or $250,000 for others. If you are concerned that you aren’t conservative enough with you retirement savings estimates or investments, you may want to speak with a certified financial planner.