Top 10 Retirement Planning Mistakes
1. Not creating a realistic assessment of financial resources. Half of all older workers haven’t calculated what they need for retirement or budgeted for retirement expenses.
2. Retiring too early with insufficient financial resources. This is a natural consequence of not preparing a financial needs analysis. And an increasing reliance on 401(k)/account-based plans presents a significant challenge. The average 401(k) account balances of older Americans are far from sufficient to fund an adequate lifetime income.
3. Starting pension benefits too early. Most workers retire before maximizing their retirement income (usually the “Normal Retirement Date”).
4. Starting Social Security benefits too early. Half of all Americans start taking benefits at age 62, the earliest possible age with the lowest amount of monthly income.
5. Drawing down 401(k)/retirement savings too rapidly. Withdrawing just 4% to 5% per year is considered a safe withdrawal percentage, but many people withdraw at much higher rates.
6. Uninformed or poor selection of financial advisors and/or products.
7. Tapping home equity too early through home equity loans or reverse mortgages.
8. Continuing an unhealthy lifestyle. Doing so increases your chances of developing expensive, debilitating conditions.
9. Not having strategies in place for medical and long-term care expenses.
10. Having living expenditures that are unnecessary, unrealistic or unaffordable, given all of the above mistakes.
And here is one more, thrown in for good measure:
Not having a good idea of what you want to do in your retirement years!