5 Retirement Savings Mistakes to Avoid
Saving for retirement is one of the most important financial practices that you can and should be doing on a regular basis. This article covers the 5 most common mistakes that people make when planning their retirement savings.
You may be investing too aggressively with your investments and losing money. Itís not a good idea to have everything in stocks as this may crash in the future with our unpredictable stock market. The Money you make today may be wiped out tomorrow. On the other hand you may not be taking enough risk with your stocks and not making the money you could be making with investments. Try to have several safe investments and a couple you can play around with to make extra money. Donít invest anything that you canít afford to lose. So weight your risk and invest accordingly and donít put everything in one basket investment wise.
Have a Retirement Budget
You havenít worked out a retirement budget to judge your needs in the future.† You may outlive the amount of money you have now because people are living longer. You should make up a budget long before you retire so you see exactly where your money is going. You can then take the extra income you have and put it into your retirement savings. You want to be able to have enough income when you retire so start the planning early.
You are saving but not taking into account the inflation. Try to use a percentage like 3 to 4% when figuring out inflation. The money you need to live on today is going to be more tomorrow. Inflation is something you need to think of and plan for or youíll be left without enough income coming in. Your budget today is going to change in the future so have a plan to adjust things accordingly and watch the current trends.
In todayís western world the average man lives to 75 and a woman lives to 80. This is just average and you may live well beyond that. If you havenít planned for the fact that you could live a long time youíll find your savings are drained when you get older. Make sure you plan for the fact that you may live a good long time as life expectancy may go up even further in our future.
Relying Too Much on Social Security
Donít rely on Social security as this just wasnít what it once was. This is going to diminish in the future and itís not a good plan to depend on this. Benefits may be cut in the future so donít plan on this being able to help you.† For those planning to retire in the future this should be removed from your plans completely or at least partially. Itís important to look to other forms of retirement and not just Social Security. Take your benefits at a later age it get the maximum return if you are near retirement.
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For additional tips and advice on saving for retirement and to learn how much you should have saved up based on your age, check out AverageRetirementSavingsGuide.com. If you need professional financial advice, seek out the help of a financial advisor.