Retirement Planning

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FOR EDUCATION ONLY

Retirement planning is complicated. Many investors make mistakes that can turn retirement dreams into panic.

Many decisions are made as retirement nears, like when to take Social Security, distributions from 401(k), a spending plan and investing retirement savings. The decisions now can lead to huge consequences.

Examine four of the biggest retirement mistakes.

1. Failing to plan is planning to fail

A happy retirement is stress free, and a retirement plan eliminates stress.

A financial plan is a map plotting the shortest path to reach your retirement goals. I they change you change your retirement plan.

2. Leaving for tomorrow what you should have started yesterday

The biggest financial regret is not saving enough for retirement. Americans usually say: “I’ll wait till I have more money”, or “I’ll start when I get closer to retirement.”

The longer you wait, the harder it will be. Starting small but sooner is better than starting large but later, because of compounding.

3. Retiring too soon or not soon enough

Are you are thinking about retiring soon? It is possible you may live longer expected, you may run into unforeseen health issues or face tough financial times.

If you are unsure your savings will be adequate, you’ll worry and as a result, perhaps work longer than you have to. You’re much better off knowing what you have and what you will need. Replace doubt with certainty and only work as long as you want to.

4. Taking too much risk, or not enough

Inflation is a risk. Take too much and you can lose your savings, but take too little, and you can lose purchasing power to inflation.

The money you retire with cannot be replaced. Investors lean toward low risk, low return investments as they age. As inflation erodes the value of money, savings drop purchasing power. Taking no risk may present risks of its own.

Investing before and after retirement require balance: investments to keep your income flowing, inflation protected and risk manageable. Your strategy will require safe, income investments, and some exposure to stocks and other investments to protect against inflation.

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