I love talking about retirement because it’s the endgame for us all. Retirement is the big trophy we get when we cross one of life’s most important finish lines.
And I want every single one of you reading this to enjoy a fruitful, long, and happy retirement. Unfortunately however, it’s an inevitable fact that some people won’t be able to achieve their dream retirement because of common planning mistakes that could’ve been avoided.
Here are the 4 biggest retirement planning mistakes that you NEED to avoid…
1. Not updating your plan
Life is far from stagnant. New things are happening every day, week, month, and year.
Incomes and expenses rise and fall, markets transition from bull to bear and back again, and change can happen fast. The single biggest mistake I see from people heading toward retirement is not updating their plan.
It may not be fun to realize you need to save a bit more, but it will help you enjoy retirement without scrambling to figure out where you went wrong. Believe me, figuring it out now is much better than figuring it out 5 years into retirement…
Make sure you’re updating your retirement plan regularly to adapt to changes in your life.
2. Putting off saving
One of the easiest mistakes to make is to say, “Eh, I can’t start really saving next year.” But that will only come back to bite you.
Check this out assuming just 8% growth per year: At 25, you would only need to save $345 a month for 20 years to build up a $1 million savings by the time you’re 65.
But a 45-year-old starting from scratch would need to save almost $1,700 per month to hit the same number at the same time.
That’s a drastic example, but it clearly illustrates that NOW is much better than LATER to start building toward retirement.
3. Not figuring out what you’ll need
Whether it’s due to fear, laziness, or some other factor, many people never take the time to honestly figure out how much they’ll need in retirement, especially if they want to continue the lifestyle they’re living before retirement.
That number is what it is. Not figuring it out won’t make it any different, but it might put a stain on you once you enter retirement…
4. Ignoring healthcare costs
A dangerous thing to do when planning for retirement is to assume healthcare costs will either remain the same or be covered for you.
It was estimated that an average married couple at 65 that retired in 2012 would wind up with roughly $240,000 in healthcare costs through retirement.
Costs are rising every year in this area so don’t take this aspect of retirement lightly. Make sure you plan properly and go into retirement with peace of mind rather than several balls still in the air.
