Top Retirement Planning Blunders

Planning for your retirement doesn’t have to be a game of chance. There is simply no way you can predict exactly how long you will work, how much money you will be able to accumulate or what expenses you may face in retirement. One thing we can each count on is the fact that life is without certainty. Therefore planning your retirement should be based on where you would like to be financially when you reach your golden years. Without a specific retirement plan you are guaranteed one thing for sure-a lack of financial resources when you need them the most. Avoid these common blunders in retirement planning and you will be on your way toward building a secure financial future.

• Setting unrealistic goals- Any financial plan must involve goals, otherwise you are just moving through life hoping you are on track. The only thing worse than having no goals is having unrealistic goals. This can go either way when planning retirement. You could underestimate how much money you will need to save in order to live comfortably or you may be setting yourself up for disappointment by attempting to save a huge amount of money with limited resources. We would all like to retire as millionaires and with proper planning it is possible for many people. As a rule of thumb, do not count on Social Security Benefits to cover your living expenses and do not plan on retiring at 25 with a million dollar a year lifestyle. For most people, under normal circumstances both goals are simply not attainable.

• Underestimate the value of time- When it comes to building a healthy retirement fund, time can be your best asset. This means you should start saving today. If you are in your 20’s today-great, if you are in your 40’s there is no time to waste. Unless you win the lottery, inherit a huge amount of cash or some other windfall, it will take time to build your nest egg. As you approach the age at which you wish to retire, you will also have to pay attention to time. The closer you come to retirement, the more conservative you have to be with your investments to ensure a strong gust of wind doesn’t blow you nest egg right out of the tree. It took years to build your retirement funds and you want to protect that money as you get closer to retirement.

• Failing to adjust to life changes- Retirement planning is not something you can set up and forget about until your last day of work. Normal changes in life such as increase or loss of income and shifts in the economy must be adjusted to in order to maximize your retirement savings. As a general rule, investing in the stock market offers the best opportunity for long term growth. There are exceptions to every rule and few people need a reminder of how quickly money can be lost when the stock market takes a downward turn. For this reason it is important to regularly review your portfolio and make adjustments accordingly.

Planning for your retirement is necessary to ensure you have resources to pay for day-to-day expenses, medical bills and other financial goals. With proper planning you can look forward to your retirement years without fear of running out of money when you can least afford the loss.