11 Most Common Mistakes in Retirement Planning

Most people think that just by having a retirement plan they will be financially sound and secure when they are ready for retirement. However, this is the most common misconception and if you are one of those people making the following retirement planning mistakes you will be in for a nasty surprise which could result in a possible disastrous financial retirement situation.

1. Retirement Planning Procrastination.
This is the most common mistake and all financial planners urge their clients that “the sooner you get started the more you will be able to contribute, and this in turn leads to be better stream of retirement income”.

2. Not taking retirement planning seriously.
This is especially true of younger people who really either don’t understand or are simply not interested in understanding this process. Clearly, the earlier one starts this process the larger the nest egg come retirement. People tend to worry about retirement once they have fulfilled all their financial priorities such as paying off their home, funding their children’s education, paying off their BMW’s etc. However, retirement experts have urged people to view retirement planning with a very high sense of urgency and importance.


3. Most people tend to misjudge their own financial needs at retirement.
Retirement can last a long time and inflation can double or treble the cost of living in 30 or more years down the road. Therefore, one must take future cost of living consideration in mind when considering the retirement planning process. Also, with rising life expectancy the need for substantial retirement assets is required to support the increasing cost of retirement expenses.

4. Not maximizing your company retirement benefits.
Most people do not maximize their retirement contribution into their company retirement plan. In some cases they don’t invest enough to achieve their company matching funds that are being offered. Clearly, this is a missed opportunity to increase the size of the nest egg come retirement age.

5. Withdrawing money from your retirement plan.
People that are constantly withdrawing money from their retirement plans will lose valuable interest or stock market gains. Also, you must be careful when taking advantage of these withdrawals as you could face penalties or early withdrawal fees if these loans are not paid back on a timely basis.

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