If you are over the age of 30, saving for retirement should be one of your top priorities. After all, we know that social security alone will not be enough to support you during your golden years. People are living longer and have more debt than ever.
Consider the following statistics:
- More than one in four (28%) retirees have mortgage debt. (Transamerica Center for Retirement Studies)
- In 1940, the life expectancy of a 65-year-old was 14 years, while in 2020, it’s over 20 years. (Social Security Administration)
- For those who are 65+, the total annual expenditures average $43,000. (U.S. Bureau of Labor Statistics)
- 42% of people are concerned about outliving their assets. (Schroders)
Unfortunately, many people tend to put their retirement savings plans on the back burner until it may be too late. Here are some common mistakes to avoid, so you are not sabotaging your retirement plans:
Not taking advantage of tax deductions: The IM Wealth Partners team featured this topic in a recent blog post. There are several itemized deductions you may qualify for. Contact your financial advisor or tax professional with any questions.
Failure to maximize an employer match: If you are lucky enough to work for an organization that provides an employer match for its 401(k), we encourage you to participate fully in the program. This type of program is free money, and it is a 100% return on your investment.
Getting your asset allocation in line with your retirement plan: We have met with so many clients who were invested too aggressively or too conservatively. Either scenario can adversely affect your retirement. There are so many considerations when making decisions around asset allocation and rebalancing your portfolio. Working with an experienced financial advisor can help you reduce your risk and stay on track with your financial goals.
Being aware of the potential mistakes you could make is the first step in minimizing your retirement planning mishaps. Our team wants you to help you plan for the retirement you deserve. If you have questions about your finances or planning for the future, please contact us.