Planning for retirement is so important these days that oftentimes we forget about what NOT to do by only focusing on what we SHOULD do. This is a mistake, as not paying attention to what not to do can hurt us even more than not doing anything at all. Here are some mistakes to avoid when planning for retirement. These will lead to retirement devastation, so take note and proceed with caution.
Using Funds on the Unforeseen
Unforeseen circumstances come into everyone's life. Of course, the greatest may be living beyond the life-expectancy we had at the time we retired from work. Other unforeseen things often come from family deaths, disabilities, Alzheimer's, and strokes. These medical costs can really take a toll on our retirement savings. Try to put away emergency funds for these types of issues, funds that don’t dig into your retirement.
Personal Economics / Living Beyond Your Means
Yes, we all do this, or most of us anyway. Living beyond your means is a very easy way to retire without having nearly as much money as you thought you would. Try cutting unnecessary expenses.
Don’t Operate Without a Goal
LearnVest.com tells us that operating without a goal is a common mistake. Estimating how much money you need to save can be tricky, but that doesn't mean you should go in blind. That’s a real recipe for disaster. Katie Brewer, CFP® with LearnVest Planning Services, says that she sees many people saving for retirement without any particular goal in mind, which can keep them behind schedule and coming up way short when it’s time to quit their day job.
Not having a goal puts you at a disadvantage, because you don’t have some sort of end point in mind. In other words, you are simply flying by the seat of your pants into retirement, which may sound fun but isn't exactly the best plan these days.
Everyone struggles with this at some point in life. Whether it is house work, school work, or any number of things, procrastination can really hinder you. The same can be said for procrastination with retirement and saving. Waiting and waiting can really hurt your bottom line. If you don’t know where to start, then your first move should be to talk to a professional about your retirement goals and overall situation.
Other things you will want to consider when planning for retirement in order to not devastate it include:
- Neglecting to Consolidate Your Accounts
- Tax Strategies
- Kids Before Retirement
- Employer Match in 401K
- Outsized Home Costs