I’m preparing for a presentation related to retirement readiness, so I started by making a list of common mistakes people making when planning for retirement. While the list probably doesn’t include everything, I would argue all of these mistakes could be corrected by a good financial planner.
In no particular order, here are the biggest retirement planning mistakes people make:
Not saving enough
Not saving early enough
Trying to time the market
Allowing emotions to influence investment decisions
Overconfidence in your investment skill
Paying too high of investment expenses
Focusing on yield rather than total return
Not having a financial plan
Worrying more about investment taxes than after-tax returns
Not having a tax-efficient retirement distribution strategy
Not maximizing tax deferral opportunities
Focusing on only one type of risk
Not having proper amounts and types of insurance
Not having an estate plan
Failure to discuss finances with spouse and children
Spending too much
Spending too little (yeah, that’s a thing)
Having unrealistic return expectations
Splitting assets across multiple advisors
Counting on income from a part-time job in retirement
Supporting adult children
Starting Social Security too early
Improper diversification
Being too conservative with investments
Being too aggressive with investments
Paying for advice from someone that isn’t a fiduciary 100% of the time
Taking advice from friends and family that don’t know your entire situation
Failure to understand your personal spending
Inappropriate asset allocation
Being over invested in your house
Underestimating healthcare costs
Not taking full advantage of tax breaks
Believing you will work forever
Buying unnecessary insurance products
Not understanding how your advisor is paid
What other items would you include on this list?
