You can plan carefully for retirement throughout all of your adult life, and have it all ruined by making one simple mistake. The closer you get to retirement, the more severe the consequences can be for making mistakes in your retirement plan. If you are nearing retirement, you must plan carefully and make sure that you do not make any of the most common retirement planning mistakes.
- Plan the date you will retire carefully – Most people have their minds made up that they will retire at a certain age, but this isn’t always possible. You may reach full retirement age and still not have enough money saved to retire. It is also possible that you’ll have more than enough to retire years before you’ve decided to take that step. Instead of setting your retirement at a certain age, it is much better to set it according to your savings goal.
- Not considering investment risk – There is no doubt that you will have to take some investment risk in order to build a nice retirement nest egg, but you will want to manage those risks carefully. When you are young it is easier to recover if you lose money on an investment, this isn’t the case when you get up into your 50s and 60s. Choose your investments very carefully once you start nearing retirement age.
- Don’t retire if you are in debt – Your income will be limited once you retire, and if you still have a large amount of debt, managing retirement could be difficult. Before you retire, pay down as much of your debt as possible. You will want to eliminate your mortgage, as well as large credit card debt and personal loans.
- Not making use of a financial planner – A professional financial planner can be very valuable when it comes to planning for retirement. They can help you invest your money wisely, decide on a target date for retirement, as well as a distribution rate that will keep you from going broke too soon.
Financial security is important for a successful retirement. If you pay attention to your retirement plan and avoid the common mistakes, getting through retirement will be easier and more enjoyable.
Larry Parman
Founding Attorney
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
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