Common Mistakes People Make When Planning for Retirement

Retirement may be many years ahead, but what you do today will determine how smoothly you handle your post-retirement life.

Dreaming about your retirement is the first step; planning and working towards your retirement goals is what will actually get you there.

 

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11 comments:

Algowire Academy said...

Here are some of the common mistakes to avoid and what to do instead.

Pratyush gandhi said...

Not guarding against a market decline. How many people take precautions to protect against a market downturn? If you're nearing retirement and not thinking about how to protect your portfolio, you're making a dangerous mistake.

Pratyush gandhi said...

1. The absence of a financial plan. I know this sounds like an old refrain, but let me try and put it another way. Retirement is an approach/avoidance situation for most of us. People have a tough time seeing too far out ­­into the future. We can see five years or 10 years into the future just fine, but it's harder to anticipate 20 or 30 years out, which is the typical period of time most people spend in retirement. As a result, we can often be unintentionally shortsighted.

Vaibhav Duggal said...


Retirement usually comes at the end in the list of financial goals for most of the people. They usually start saving for it and working on it when they are near the end of their working life.

Tushar Varma said...

As the cost of health care continues to rise, retirees will face some tough choices. No one wants to face the possibility of a long-term care event happening in the twilight years of retirement and not being able to afford care is an increasing concern. The Department of Health and Human Services estimates that, of people aged 65 and over, nearly 70 percent will need long-term care in the future.

Tushar Varma said...

If you still have outstanding debts other than your mortgage, those need to be taken care of first, before you enter retirement. After the other debts are tackled, then you can make your mortgage a priority. Getting rid of all your debts will relieve you of a lot of financial pressure in your retirement.

Shivani Gupta said...

The most common mistake is the lack of planning for an avenue which gives retirees a regular stream of income. If you wanted the predictability of Social Security or a pension, you might go to an insurance company for an immediate fixed annuity - a contract for a guaranteed income stream for a specified time. As "immediate" suggests, the contract starts paying you virtually right away, usually the month after purchase and monthly thereafter.

aarushi malik said...

Retirement is the beginning of that phase of life wherein there's an ending to the days earning while spending not only continues but starts pinching the pocket as well.
The most common mistake most people make is procrastinating the thought of retirement planning thinking its too far.
When one starts planning retirement, tax planning is a major aspect that should be kept in mind. Since each retirement account is taxed differently, withdrawal should be made in a such a way so that one does not end up paying more taxes.

Shivani Gupta said...

A common problem faced by not only retirees but also teenagers is the lack of savings! Savings must start at an early age, either in the form of bank deposits or simply a piggy bank or any other way. Presence of savings reduces anxiety and uncertainty about future expenditures. Especially at an old age, when a major part of the expenditure goes into healthcare, maybe a child's marriage,etc. Don’t wait to start saving for retirement. The sooner you get started, the greater your chance of reaching your retirement goal because compound interest can work its magic.

Shivani Gupta said...

You may rush to get out of the market after a downturn. When the market takes a big hit, you may be tempted to pull out all the stocks in your retirement portfolio. If you do, you’ll miss the gains if the market turns around. You want to keep a good mix of asset classes in your portfolio: stocks, bonds, and cash. And once a year, you should rebalance to keep yo

Shivani Gupta said...

Unforeseen circumstances come into everyone's life. Of course, the greatest may be living beyond the life-expectancy we had at the time we retired from work. Other unforeseen things often come from family deaths, disabilities, Alzheimer's and strokes. More common are large uninsured medical costs, particularly dental, vision and hearing problems — areas with little Medicare or insurance coverage. Some come from having retired too early thereby having fewer years to save and more years to fund in retirement.

No matter how well thought out your plans for the future may be, unforeseen items are just that, so setting aside some emergency funds to help with the unforeseen is an important thing to do. Retirement plans should not be based on exhausting every resource that might be available over our expected lives.