1. Not having a written plan. It’s simple, but the first step in achieving a comfortable, income-secure retirement is having a plan. Yet many investors don’t have a retirement plan. According to the Employee Benet Research Institute, 59% of Americans haven’t calculated how much retirement money they should have saved.
2. Potentially retiring too early. While it may be an exercise in patience, working for even a few years longer can do wonders for your income security. You bring home more money to work with, and if you’re behind in savings, you can put away those balances for your retirement future. A delayed workplace departure also means more time for your savings to grow tax-deferred.
3. Not having a “retirement-ready” diversication strategy. Sure, deciding on an investment strategy and putting away money into retirement accounts takes work. Years of discipline and hard work! But while accumulating assets and building up savings requires diligence, it’s often taking money out of those retirement accounts – and minimizing taxes – that is trickier.
4. Planning only for joint income needs. If you are married or have a partner, chances are your retirement income plan is based on two people. Your plan may account for your needs together, and may include joint lifetime Social Security payments, pooled investment funds, cumulative portfolio assets, and your total savings. But what about the question of survivorship? What would happen when one of you is gone?
5. Neglecting costly health and care needs. Many people think they won’t have any long-term care needs. But the numbers may surprise you. According to the U.S. Department of Health and Human Services, someone turning 65 today has a 70% chance of needing long-term care in the future. And for that matter, other health costs, not to mention all-around costs of care services, can add up quickly.
6. Not planning for a potentially long retirement. Life expectancies are on the rise. Thanks to medical and technology innovations, people are living longer. And in turn, this increasing longevity acts as a “risk multiplier,” enhancing the eects that ination, taxes, market corrections, and other risks may have over the years.