Common Retirement Planning Mistakes
There are many bumps in the road when it comes to planning for your future. It’s never just a straight course from point A to point B; it’s a curvy, winding road that can leave your mind spinning.
Although you never know what will happen in the future, there are ways to prevent blunders from occurring in your retirement planning efforts. Here is a list of five retirement planning mistakes you can avoid so can retire in style.
Mistake 1 – You Have No Plan
Seems obvious, right? After all, you’ve reached this site probably because you don’t have a plan in place. But don’t worry, you’re not alone. According to the Retirement Confidence Survey from the Employee Benefits Research Institute, 48 percent of all American workers haven’t calculated how much money they will need to save for their retirement.
But this is a situation that you can easily rectify. Just write down your future goals then contact a retirement planner to walk you through the process.
Mistake 2 – Not Enough Money/Not Starting Early Enough
This is a fear with many. How do you know you saved enough money for retirement? After all, no one wants to go back to work at the age of 80! Although you may think you have enough, chances are you’re not even close.
Running out of money can happen because you failed to plan for the little stuff. A large car repair costs. A leaky roof. A disabled family member that needs your care. Any medical issues that arise. If don’t plan properly for these inconveniences, you’re soon going to see your savings dwindle away.
Another mistake is not saving early enough. We think we have all the time in the world to save for retirement. After all, you have a lot on your plate financially. But what you don’t realize is retirement will come much quicker than what you thought. Just when you think it’s time to start saving, it may be too late. So the earlier, the better.
Mistake 3 – Relying on Social Security or a Pension
We all heard the old joke – “Social Security will be a thing of the past once I retire!” And the sad part is, the joke is sort of true. The rate of return for Social Security is slowly dwindling away and with more and more Americans living
In addition, pension plans are slowly being converted into contribution plans. Many of these benefits are under-funded and won’t provide enough funds you will need for the future.
Mistake 4 – Spending Instead of Rollover
We all go through job changes through our career. And instead of rolling over the 401(k) we had with previous job, many young adults prefer to cash it out. This is a mistake. Not only do you have to face the tax consequences of your actions, you just cashed out your tax-deferred investment!
It’s much better to roll that 401(k) into an IRA. An IRA can give you some investment flexibility as well as lower the costs of managing it.
Mistake 5 – Investing Too Aggressively or Not Enough
You want to see your retirement plan go down the drain fast? Making bad investment decisions is the quickest way to do that. If you try to make up insufficient savings by making unjustified risks, you are endangering everything you worked for. At the same time, if you’re nervous of taking a risk, you could be hurting your investment.
Investment takes strategy and skill. That’s why it’s always best to speak with a retirement planner to guide you in the right direction. The advisor will give you the right information you need to reach your retirement goals.
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Ready to avoid these retirement planning mistakes and plan for the future? Now is the time to act! Contact Capital Solutions Center to speak with a retirement planning advisor today.