by Brian Bagnall
Planning for your retirement is one of, if not the most important financial goals you will take on. And the stakes are quite high.
In fact, failing to avoid the 3 mistakes you’ll learn about today can transform your golden years from joy, freedom and independence to penny pinching, dependence, and even poverty.
And sadly, most Americans believe they are on track by funding IRA’s or 401k retirement plans and some still believe Social Security or a Company pension plan will be enough to retire comfortably.
The statistics are both shocking and scary: according to Hamilton Financial, 9 out of 10 people will retire in poverty or run out of money before passing away.
However, if you are able to avoid these three mistakes you’ll also be able to avoid becoming part of the statistic:
Retirement Planning Mistake 1: Not Having a Plan
The Employee Benefits Research Institute recently performed a Retirement Confidence Survey which revealed that 60% of workers have not calculated how much money they need to save for their retirement income needs.
Sadly, most people spend more time planning their next vacation than planning their financial future. And as you now, failing to plan is planning to fail.
If you have not taken the time to set measurable and specific financial objectives in writing and designed and implemented an action plan to achieve them, there’s a very high chance you won’t be able to enjoy freedom and independence in your golden years.
There are many reasons why such a high percentage of Americans experience so much financial hardship after retirement, but failing to plan is the number one retirement planning mistake.
Financial Coaching is a great way to get help designing your retirement plan. Having a monthly session with your Financial Coach can provide the accountability and experience necessary to support you in completing the implementation of your retirement plan, but even a single session can provide you with the clarity you need to get things going yourself.
Retirement Planning Mistake 2: Not Saving Enough and Not Starting Early
I know, I know. Nobody wants to be told to save more. The value of savings is so often repeated it sounds like a boring lecture. But the reality is that you’re either consuming your retirement today or your saving for it.
Chances are you have already heard the “save 10%” rule of thumb. It’s actually a workable formula if you start in your 20’s and plan to retire in your sixties.
But ideas of retirement are different, and if your vision is to retire at 50 with a waterfront property, then the truth is that saving just 10% isn’t likely to cut it – particularly if you wait to start saving until age 40 or later.
Saving money for retirement is all about alternatives and priorities. It’s about choosing a few minor inconveniences today that will compound into a comfortable retirement tomorrow.
What do I mean by a few minor inconveniences? For example, what do you think is the real price of the fancy coffee drink you buy each day?
$5 per day, times 20 days per month, for 50 years at 10% interest results in $1,876,000.00 that could be saved for retirement. When you look at it that way, a few minutes in the morning filling a thermos bottle seems like a small price to pay for that additional security in your retirement.
Especially when we consider it could be the difference between needing financial help from your children to survive and being able to stretch a helping hand when they need one.
Retirement Planning Mistake 3: Investing Too Aggressively – Or Not Aggressively Enough
Investing for your retirement is a matter of balance. You must be able to balance your “fear and greed” by making an intelligent analysis of risks and rewards.
You are probably very aware that trying to make up for insufficient savings by investing too aggressively and taking unjustified risks is a sure way to drive your retirement funds down to zero.
However, fearing losses so much you become overly conservative and invest only in guaranteed annuities and CD’s is a guaranteed way to lose purchasing power over time due to the low returns they provide.
In fact, the returns frequently end up being negative after taxes and inflation are factored in.
Investing requires both an offensive and defensive strategy, and again, a Financial Coach can be of great help helping you design such a strategy.
And as I stated before, spending even an hour of your time with someone who has years of experience, knowledge and success under his or her belt in the retirement planning field can provide you with the clarity you need to take it yourself from there.
While there are many renowned experts who can help you boost your investment’s ROI, there are also many “experts” who will do more harm than good. So always, always, make sure you perform extensive research before you trust someone with your financial future.
Now, if you have come to trust me as an expert in my field, there is a way in which I can help you design a custom tailored retirement plan that’s specific for you, set long term and short term investment goals and design an investment strategy that includes both conservative and growth oriented investments.
Every month, I hold 10 Investment Boosting sessions in which I get on the phone with people who are committed to improving their financial future and living comfortably during their golden years.
While the spots may be filled out by the time you read this, you can learn more about how the process works and apply for an Investment Boosting session by clicking here:
If I do get to jump on the phone with you, you’ll walk away with a retirement plan with specific, measurable financial goals and a custom investment strategy to fit your needs.
If for any reason we don’t get to talk, I still strongly encourage you to find a Financial Coach who has a proven success record. It can cut years off your retirement plan and seriously increase the money you’ll have available once you do.
If you found this article helpful, don’t forget to leave a comment below. 🙂