There are some common retirement pitfalls — this expert should know: 1. Relying on factors outside of your control, like inheritance or an assumed rate of return 2. Overreacting to market volatility 3. Inactivity
There are a number of common pitfalls that can derail a retirement plan. In this article, I’ll discuss nine of the most common ways preretirees and retirees can stumble in the path to retirement and how to avoid them.
Every individual who plans to retire needs to recognize that he or she can only count on their own actions. Markets are volatile, promises can be reneged and nothing is guaranteed. But you have complete control over your money and your plans, and you can change both as needed. However, having a set-it-and-forget-it mind-set about your retirement investment vehicles also means you will miss out on growth. Make sure you regularly rebalance your portfolio to ensure that your asset allocation continues to reflect your goals and time horizon.
Retirement pitfall No. 5: Taking a loan from your 401 This is an enormous no-no at any time in your career, but it’s a particularly disastrous mistake if you’re within five years of your retirement. Money removed from your 401 is money that cannot grow , even if you are able to pay it back relatively quickly. The lost time equals lost growth, which you cannot afford to waste.Retirement pitfall No.
Try to hold off on taking your Social Security retirement benefits until you have reached what Social Security calls your Full Retirement Age or age 70.It’s easy to see why retirees are such tempting targets for scammers; they are often sitting on nest eggs they might not feel confident handling. Learn to feel comfortable asking your children or family members for advice and remember that asking lots of questions can help you avoid being scammed.
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