Avoid These Retirement Planning Pitfalls
I’d like to share with you some potential retirement planning pitfalls and how to avoid those. So starting off, let’s talk about not having any type of review process. Is it something where you essentially have these different retirement accounts and you’ve never really maybe sat down with an Advisor to work through those and then periodically review all that information? Because as you can imagine, your life circumstances change and the ongoing market is going to be changing as well. So you want to be having some type of review process in place. What about lack of diversification? Are you structured in a portfolio where maybe you work for a certain company and you really like that company’s stock. So you have a heavy percentage of your portfolio in that stock. Well as any Advisor will tell you, it’s encouraged to have a greater diversification. So that way, if something were to happen to that particular company, then you have other assets to help mitigate that risk. What about under performing assets? Have you looked at different holdings over time? And you say well, this isn’t really living up to what the goals are that we established. And then maybe it’s time to make a change, even if that position is down at the time. You might say, well it’s best to sell that and move on to some other type of investment. What about psychological blocks? You know that might be the fear of the future of the market. You might be sitting there, I’ve talked to several people who have said well, I just don’t feel comfortable with the market right now. But then they think about it and they said, well I’ve been saying the same thing for maybe the past several years. So that might be it or it might be on the opposite end, the fear of missing out. Maybe you’re in a position where you say, well what if that market takes off? I don’t want to miss out on that. So again, I would say it comes back to your comfort level with risk and matching up appropriately. A misconception of longevity, how long do you think you’re going to live. I don’t want you to just predetermine that based on well, my family only lived, they only lived a short amount of time. But you might be perfectly healthy and might be expecting a longer lifetime. Another area is relying to heavily on your Social Security and/or maybe ignoring your Social Security. That can be a vital piece of your overall retirement income plan. And I want you to be looking at that as far as should you be starting at 62 or perhaps delaying to 70. There’s a lot of years in there to evaluate. Another area might be thinking that you’re going to work indefinitely. Have a plan for if you were to retire perhaps at a younger age than you may think that you’re working, just to make sure that you’re in a good spot. Last one is going to be ignoring tax implications. I think too often people aren’t really factoring into their retirement plan what the taxes are on their portfolio, especially when they start to take income. All of these are major pitfalls and areas that we encourage you to create a plan. And that’s where we’d love to sit down with you and help you plan to retire well.