Retirement Pitfalls to Avoid

Retirement planning is a wide enterprise, demanding discipline and attention to detail. As such, it's bound to be fraught with pitfalls. Most of us don't realize just how quickly time passes. Like many other large events in our lives, retirement always seems such a long way off that we often assume we have more time than we actually do to prepare for it.

Starting to Plan Too Late

One of the biggest mistakes people make is waiting until their 50s or 60s to start planning for retirement. Waiting this long typically means that more sacrifices will have to be made, sometime sacrifices that are too hard to handle.

Not Saving Enough, Early Enough

The best advice is start saving early, save often, save consistently. It's easy to state but harder to implement, and that's usually the trick with great advice.  

Ignoring Free Money

Many investors fail to take full advantage of their employer's contribution matching, which is just about the same as throwing away money. Regardless of the amount of the match the employer provides, the match is free money, take advantage of it this immediately.  

Failure to Diversify

A common investment pitfall is spending far too much time trying to pick individual stocks that will increase in value. It's much more important to understand proper diversification. Diversification among stocks, such as owning growth and value stocks, stocks from different market sectors, and stocks from different countries, is critical to a retirement portfolio.

Underestimating the Effects of Inflation

Inflation is the biggest risk to any retirement savings plan, do not underestimates its effects. Inflation is the sustained increase in the price of goods and services over time. Most experts agree that retirees need to assume an annual inflation rate of 3-4%, but a good retirement plan should account for periods of high inflation as well.

Underestimating the Need and Cost of Healthcare

Not planning for rising healthcare costs is a huge retirement planning pitfall. There's no doubt that healthcare costs are not only rising, they are rising faster than the rate of inflation.  

Going it Alone

An all too common retirement planning mistake is going it alone. This usually results in missed investment opportunities, sloppy planning, and lax savings schedules.  And in the end lost assets that can not be replaced , going it alone is to often a component of someone just simply afraid to ask for help, when it comes to your retirement do not go it alone-ask for Help!

If you are considering Retirement Planning, call for a free consultation today.