According to a survey of the Employee Benefits Research Institute, only 14% of adults are very confident they will live comfortably after quitting work and 60% have less than $25,000 in savings? Where are you?
In these challenging financial times, most people make the mistake of not planning for their retirement effectively. These mistakes are compounded by the turbulent financial markets in which most of us have our retirement money invested (many employer-sponsored 401k plans). Listed below are mistakes many people make that effect their quality of life during their retirement years.
The Seven Biggest Retirement Mistakes
- Assuming you have control over when you quit (job loss and illness can hasten retirement)
- Ignoring the tax impact of distribution in retirement (taxes can take 30-50% of your retirement)
- Not saving enough for medical costs (medical costs continue to climb as you age)
- Failing to lock up lifetime income (make sure your retirement pays you until the day you die)
- Retiring too soon (waiting a few years to retire can increase your nest egg by 30% or more)
- Underestimating longevity (may people outlive their retirement nest egg)
- Drawing down retirement savings too rapidly (have a drawdown plan in place)
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