Financing Your First Business

Five Retirement Planning Mistakes

8 July 2018

Jimmie Holland

Working every day, you're probably not thinking about retirement regularly. For that reason, mistakes may come more easily to you when you begin preparing. In fact, these errors might have already been made.

You're Not Cutting Back

Many who plan for retirement forget to start acting on their plans now. Like most people, you should examine current spending habits and begin to reduce luxury or leisurely expenditures. The money you're using on eating out could be used to purchase vital medication in your old age. Be more discerning when deciding how to spend your dollars.

You're Forgetting Emergencies

Any prep you're doing must include all aspects of retirement. If you're only trying to stay at your current level of comfort, you may not be doing enough planning. It's entirely possible you're leaving things out.

Any plan has to not only allow you to live life in the same way but also permit you to deal with unforeseen events. For example, what if you become ill? What if there's significant damage to your house? Your retirement plan must include some provisions for emergencies and events you never expected.

You're Not Investing

Investments are key for most retirement plans. Being able to earn money on your savings without more work from you can finance much of your retired life. Your needs and age should determine whether mutual funds, bonds, or separate stocks are most beneficial. 

It's also vital to remember taxes and fees involved with investing. Many people don't plan for these costs, which could drastically reduce any overall income from mutual funds, stocks, or other investment tools. 

You're Not Thinking About Death

You may be most interested in how you'll be supporting yourself once retirement arrives. However, estate planning should figure into your overall retirement strategy. Your family will still need provisions when you die; any plans you set in motion for retirement should continue to produce income and financial security for them.

You're Not Keeping Family Informed

Your family -- especially a spouse if you've got one -- should not be surprised by your plans. They must know who beneficiaries are, where relevant documents are, and what your goals are. They may not seem interested in minute details, but keeping them informed is smart for everyone. 

Professional financial services can guide you away from these retirement pitfalls. Options and actions available for your financial situation can be discussed so you're always moving toward retirement in a wise way.

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