Pursuing your retirement dreams is challenging enough without making some common, and preventable, mistakes. Here are eight big mistakes to avoid.
Yes, the biggest mistake is having no strategy at all. Without a strategy, you have no way of knowing how you’ll get to your goal, or even if your goal is realistic. Creating a strategy may increase your potential for success, both before and after retirement.
Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then, make adjustments based on changes in your personal situation, not due to market ups and downs.
Not Maximizing Tax-Deferred Savings.
Workers have tax-advantaged ways to save for retirement. Not participating in your workplace retirement plan may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions. No retirement plan at work? You may have the option of funding an individual retirement account (IRA).
Prioritizing College Funding over Retirement.
Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.
Overlooking Health Care Costs.
Disability and/or extended care needs may be an expense that can undermine your financial strategy for retirement if you don’t prepare for it.
Not Adjusting Your Investment Approach Well Before Retirement.
The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Make sure you are preparing your portfolio for retirement. Investing according to your risk tolerance is critical.
Retiring with Too Much Debt.
If too much debt is bad when you’re making money, it can be especially harmful when you’re living in retirement. Consider reducing your debt level before you retire.
It’s Not Only About Money.
A rewarding retirement requires more than money. Smart pre-retirees know how they’ll spend their time, where they’ll find social interaction, and how they’ll continue to feel fulfilled and satisfied. Don’t leave these critical elements out of your retirement planning.
Andrea L. Blackwelder, CFP®, ChFC and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.
1 – theweek.com/articles/818267/good-bad-401k-rollovers [1/17/18]
“Wisdom Wealth Strategies, LLC is a registered investment advisor offering advisory services in the states of Colorado and California, and in other jurisdictions where exempted.” This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates.