September 30, 2013   Retirement Planning

Three Common Retirement Planning Mistakes


As millions of baby boomers head into retirement, many discover that they were not as well prepared as they believed themselves to be. As individuals prepare for retirement, it is important to be aware of some of the more common retirement planning mistakes in order to avoid them in practice.
 
The first mistake is failing to get an early start to planning. The earlier an individual begins saving for retirement, the easier it will be to accumulate sufficient retirement resources. Younger people who are busy settling into their careers, getting married, and purchasing their first homes often defer their retirement planning. This can become dangerous in the long run.
 
The next mistake is underestimating retirement needs. Many people do not realize how much money they will need to acquire in order to retire comfortably. On average, a person must replace almost 90 percent of his or her income, pre-retirement, to maintain his or her standard of living.
 
Many people also overestimate their ability to continue working. People with desk jobs often believe that they can save less because they will be able to continue working as long as they would like. This is often not the case, however. Unfortunately, many people have to leave work due to reasons outside of their control. These reasons include poor physical or mental health, being laid off or otherwise losing their job, or having to care for an ailing spouse or other loved one.
 
In order to best prepare for your retirement, start early, save as much as you can, plan for contingencies, and work with a professional you can trust to guide you.

 

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