The meaning of retirement is rapidly changing. Many people are worried about outliving their money and plan on delaying retirement. But compared to the last century, there are trends pointing to earlier retirement with higher quality of life expectations. Unfortunately, there are a number of financial risks that can threaten and even reverse these trends.
A huge concern is that a great numbers of people may outlive their assets and be forced to fall back on their children and government programs for survival.
A secure retirement is not easy to achieve. The following describes the most common retirement planning mistakes people make.
1. Not taking appropriate investment risks when considering your timeline to retirement.
2. Miscalculating the amount you need to save. Not being prepared for health issues, divorce or inflation.
3. Borrowing from your 401(k) leads to losing growth potential, losing out on your employer match, and repayment and tax issues if you leave that employer.
4. Not understanding how to make the most of your Social Security benefits.
5. Misjudging health care costs, like relying on Medicare which doesn’t cover things like dental and vision.
6. Underestimating your retirement tax rate by taking too much money out monthly from your retirement savings.
7. Not having a will, updating your beneficiaries or expressing your wishes to a power-of-attorney.
Courtesy of FinancialEngines.com