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Top 3 Mistakes Made When Planning for Retirement

Top 3 Mistakes Made When Planning for Retirement

July 10, 2017

Retirement is exciting! It’s a time to slow down and appreciate life, your hard-earned savings, and those you love. You work diligently all your adult life for this, and the time off is well deserved.

Unfortunately, many retirees face difficult times as they realize retirement isn’t what they had expected. Their funds run out faster than expected, leaving them unable to enjoy this time like they should. Avoid these common mistakes in order to have a stress-free retirement.

Mistake #1: No Retirement Plan / Assuming Your 401(k) Will Be Enough 

Far too many hard-working people overlook the importance of setting a retirement goal. They work, get paid, pay their bills, and call it a day. They may consider how they’ll make ends meet during retirement, but never create a solid plan other than adding money to their account. They may assume they can live off of their 401(k) but they don’t sit down and calculate exactly how much they’ll need to pay the bills, let alone enjoy life comfortably after retirement. 

Solution: Comprehensive Retirement Planning With a CFP in Palm Beach Gardens

It is critical that you consider your retirement needs and form a step-by-step plan for how to pursue them. While you can try to do this on your own, a certified financial planner (CFP) is an expert at determining exactly what you need to be financially stable during retirement. A CFP in Palm Beach Gardens will help you: 

  • Calculate your retirement planning goals
  • Commit (in writing) to a savings plan
  • Create a detailed plan of action that will achieve your goal
  • Review your investments and savings patterns regularly and make changes as necessary

Mistake #2: Not Participating in Your Company’s Retirement Plan

Many companies offer employer-sponsored retirement plans such as a 401(k) or will contribute to your personal Roth IRA. Oftentimes, employers will even match a certain percentage of what you put in, which essentially doubles your balance. This makes it simple to fund to your retirement accounts, and not contributing to an employer-matched plan is like throwing away free money.

Solution: Contribute at Least as Much as Your Employer Will Match

Find out which programs your company offers, and then enroll in the program(s) that best suits you. A wealth management specialist can help make an informed decision if you have options. Once enrolled, contribute enough to receive the match.

Mistake #3: Borrowing From Your Retirement Plan

Everyone has emergencies arise throughout adulthood that requires large amounts of money. Whether it be to purchase a home, replacing a roof, medical events, or other major expense, retirement savings is often the first place to dip into.

Unfortunately, borrowing or withdrawing from a retirement account can cause you to incur many penalty fees and lose out on any interest that would’ve accrued on your larger balance. If you’re never able to save enough back up to replace it, then the money isn’t there when you need it during retirement.

Solution: Talk to a Wealth Management Specialist

Before withdrawing from your retirement plan, seek advice from a professional financial planner. He or she will help you understand your options and decide on the best situation for your circumstances. It may be a wiser decision to borrow from a financial institution as opposed to your retirement plan. Make sure to consider the purpose, cost, and effect of each of your loan possibilities.

Our Certified Financial Planners in Palm Beach Gardens Help You Avoid Costly Retirement Planning Mistakes

Our certified financial planners / wealth management specialists are here to help make informed decisions regarding about your money. We strive to educate you as our client along the way, ensuring that you become a key part in pursuing your financial goals.

Whether you are 22, 42, or 62, you will benefit from speaking with a knowledgeable financial advisor, so you enjoy retirement without financial worries. Call our CFPs in Palm Beach Gardens today at (561) 223-3252 to schedule a consultation.

Disclaimer: Investments are subject to market risks including the potential loss of principal invested. Retirement plan withdrawals may be subject to taxation and penalties when withdrawn early.