Retirement Mistakes to Avoid at Any Age
February 17, 2022
February 17, 2022: If given the opportunity, many people would gladly retire tomorrow. Indeed, relaxing and living off of your investments doesn’t sound like such a bad life, but unfortunately the average age of retirement continues to gradually get older. The retired life might seem like it’s getting further out of reach rather than drawing closer, and this is especially true if you fall prey to some of the most common retirement mistakes that can derail your progress. Be careful to avoid the following worst retirement mistakes when you’re developing your retirement strategy.
Lack of a Strategy
Unsurprisingly, one of the most egregious errors you can make when strategizing is having no strategy at all! This is an incredibly common mistake, though, which often sets people back years in their retirement savings. Simply saving money isn’t enough. You need to have a clear and specific plan outlined that identifies your anticipated expenses, your monthly contribution to savings, your retirement investment portfolio, and your target monthly withdrawals. Defining each of these details will bridge the gap between planning and happening.
Delaying Your Savings
If you’re in your 20s or 30s, you might think that you have time before you have to start saving for retirement. This is yet another one of the most common mistakes, though, that can seriously disrupt your progress in achieving your retirement dreams. If you have the funds and ability to start saving now, do it now — even if you have to start small. You don’t want to delay saving until the time is perfect and deplete your investments in the process. Sooner is always better when it comes to saving for retirement.
Bad Tax Planning
Admittedly, tax planning is one of the more complex aspects of a retirement strategy. It’s not surprising, then, that many people overlook or underestimate its importance. You can avoid this pitfall by learning about and leveraging all of the tax breaks that you can take advantage of when you start saving for retirement. IRA accounts and 401(k) accounts, for example, offer tax-deferred investments. Just be sure that you plan adequately for any taxes that you may owe when you withdraw from one of these accounts.
Underestimating Costs
Underestimating living expenses is a mistake that people tend to make even before retirement — so of course, it’s even more likely to occur when your income and cost of living are less predictable. Still, you should plan thoroughly to try and avoid this problem. Living beyond the means that your savings can sustain may cause your retirement to be cut short, and this is a disappointing outcome for anybody. It’s best to over-save, underspend, and overestimate your potential living expenses for your years spent in retirement.
About 1891 Financial Life
At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.