Stepping into retirement is an important milestone, and it’s one that can come with intimidating decisions and various challenges. Like many retirees, you may be concerned about making costly mistakes. Here are eight common mistakes we see with retirees or those considering retirement.
1. No Strategy: The biggest mistake we see is having no financial strategy at all. Without a strategy, you have not defined your goals, leaving you with no way of knowing how you’ll get there — or if you’ve even arrived.
2. Frequent Trading: Chasing “hot” investments often leads to despair. Instead, create an asset allocation strategy that is properly diversified with your objectives, risk tolerance, and time horizon in mind. Then make adjustments when you need to based on changes in your personal situation, not due to market ups and downs.1
3. Not Maximizing Tax-Deferred Savings: Workers have tax-advantaged ways to save for retirement. Not participating in your employer’s 401(k) may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.2
4. 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 do the same for your retirement.
5. Overlooking Healthcare Costs: One mistake we see retirees make is postponing planning for extended care. Plan ahead for medical expenses, or they could potentially undermine the hard work you put into your financial strategy.
6. 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. Consider adjusting your asset allocation so you don’t find yourself selling stocks when prices are depressed.3
7. Retiring with Too Much Debt: If too much debt is bad when you’re making money, it can be even worse when you’re living in retirement. Consider managing or reducing your debt level before you retire.
8. It’s Not Only About Money: Above all, a rewarding retirement requires good health. So maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active. We want you to enjoy your retirement, after all!
Keep these things in mind to help avoid costly mistakes. If you are looking for a deeper dive into your unique situation, sign up to meet with one of our planners!
1. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation and diversification are approaches to help manage investment risk. Asset allocation and diversification do not guarantee against investment loss. Past performance does not guarantee future results.
2. Under the SECURE Act, in most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 72. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.”
3. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss. Past performance does not guarantee future results.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2022 FMG Suite.
The Retirement Solution Inc is a SEC registered investment adviser. The Retirement Solution Inc may only transact business in those jurisdictions in which it is registered or qualifies for an exemption or exclusion from registration requirements. The Retirement Solution Inc website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication The Retirement Solution Inc website on the Internet should not be construed by any consumer and/or prospective client as The Retirement Solution Inc solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by The Retirement Solution Inc with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of The Retirement Solution Inc. A copy of The Retirement Solution Inc current written disclosure statement discussing The Retirement Solution Inc business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov
Investment Advisor Public Disclosure website or from directly from The Retirement Solution Inc upon request at no additional cost. (Request the Firm Brochure by calling 888.500.5830.)
This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.