You’ve worked hard for decades — now it’s your turn to kick back, relax and retire. But the trick to a stress-free retirement is a hefty dose of forward planning, so you can maximize the benefits without getting hit with any extra surprises.
Read on to see a few key retirement planning mistakes that can threaten your plans — and learn how to avoid them.
1. Not Having a Retirement Plan
First things first, you need to have a plan. From the moment you read this sentence, it’s time to start putting together a few key details of how — and when — you aim to retire.
From that point, you can get an idea of how much money you need to save in order to make that a reality. From there, you’ll have enough info to find a product that will make it come together.
2. Not Taking Your Employer’s 401k
Another major misstep is not taking advantage of all retirement options — a major one being opting into your employer’s 401k plan.
Many times, your workplace will offer to match your contributions — which is essentially free money. By not opting into your plan, you’re missing out twofold on potential savings.
3. Not Knowing How Much You Need to Retire
This one seems to go without saying — but for many, it needs to be said.
Often, soon-to-be retirees lowball the amount they should be putting away into savings in order to maintain the lifestyle they want. Once the time actually comes to quit their day jobs, however, they’re left with the reality that it simply isn’t going to cover it.
Bottom line: Even if you think you’re saving enough, try to save a little more.
4. Having Incorrect Beneficiary Designations
Another dangerous mistake many people make during retirement planning is not keeping things up to date.
Many times, people start retirement plans at different seasons in their life — often, it comes soon after they become newlyweds or new parents. As life goes by, things change — your life is no exception. Sadly, that sometimes leaves retirees with outdated information on their retirement accounts.
In the worst case scenario, it could mean leaving your nest egg to your ex-wife or having it go to a person you don’t speak to anymore.
5. Paying High Retirement Account Fees
Another major misstep for many retirees comes by simply not reading the fine print. Simply put: Not all retirement plans are created equal.
Some plans slap their planholders with astronomical account fees just for “account maintenance” and other routing functions.
Don’t lose your hard earned money due to negligence. Be sure to go over your account statements and see where your money is going — hopefully, mostly back into your pocket.