If you think that you will be financially secure when you decide to retire just because you invest in a retirement plan, think again! Did you know that there are common mistakes on retirement planning that you should know about in which you can also use as a guide to re-evaluate your status? If you are making these mistakes, you could be in a big trouble.
Here are some of the mistakes of retirement planning:
· Not taking full advantage of your company retirement benefits – it is wise that you invest money into your company retirement plan as much as you can afford.
· Withdrawing money from your retirement plan – Be very aware when availing of loans or withdrawals, because aside from losing interest, you could face penalties or early withdrawal fees.
· Not actively monitoring your investments – it is extremely important to keep track of your investments in order for you to be aware of any discrepancies.
· Relying on Social security for your retirement income – social security may provide a considerable share of your retirement income, still it can be of great help if you have other means of income as a back-up in case there are other unexpected expenses that might come up. In addition to social security, it would be best if you have a company pension or retirement plan and personal savings.
· Relying on your spouse’s retirement plan – this is one of the most common mistake of retirement planning people do. It is possible that a spouse with a retirement plan could die leaving the other spouse with no income. Instances like divorce or illness can also bargain the only spouse retirement, therefore both spouses should have a separate retirement plan to best secure your retirement days.
· Forgetting to review your plan regularly – always conduct periodic review of your retirement plan to ensure that you are making the most of your plan.
· Practicing poor asset allocation – poor asset allocation can sometimes be a financial suicide. The secret is to broaden your horizons so that if one investment decreases in value, another will hopefully increase.
· Not checking your booklet/financial advisor- there are plenty of highly regarded brokers and financial advisors who have the expertise about how your portfolio should be set-up and maintained, but there are also who aren’t and are simply ill informed. So, be aware and make sure to check up on credential and track records on anyone you want to entrust your retirement savings.
· Relying too heavily on your stock – your company stock is one of the excellent ways to save for your retirement. But, it is also best to have a good investment mix in your retirement account.
· Not taking retirement planning seriously – this could be the worse mistake you can make with your retirement plan. If you start early on retirement planning, you may be able to retire early and keep the lifestyle you like once retired.