Eight Mistakes That Can Upend Your Retirement

Avoid common mistakes for a smoother retirement journey.

Pursuing your retirement dreams is challenging enough without making some common—and very avoidable—mistakes. Here are eight to steer clear of while preparing for and living out your retirement:

1. Not Maximizing Tax-Deferred Savings:

   During your working years, you have tax-advantaged ways to save for retirement. For most, failing to participate in your employer’s 401(k) may be a big mistake, especially if you're missing out on employer-matching contributions. It’s also important to spend time selecting investment choices that align with your goals and risk tolerance.

2. Prioritizing College Funding over Retirement:

   Your kids’ college education is important—but your retirement should come first. Loans and grants can fund college, but there’s no financial aid for retirement.

3. No Plan:

   Putting a financial plan in place before retirement can pay big dividends. Knowing your post-retirement expenses helps determine how much to save and how to invest. A financial advisor can guide you through this process if you prefer not to navigate it alone.

4. Frequent Trading:

   Chasing “hot” investments or timing the market often backfires. A well-diversified asset allocation strategy based on your needs and time horizon is key. Reassess your strategy only when your personal situation changes—not due to market noise.

5. Not Adjusting Your Investment Approach Well Before Retirement:

   The closer you get to retirement, the more important it is to reduce risk. Adjusting your asset allocation in advance can help minimize the impact of market downturns right before retirement.

6. Overlooking Healthcare Costs:

   Healthcare is a significant retirement expense. Budget for insurance premiums, Medicare, and out-of-pocket expenses, which continue to rise each year.

7. Retiring with Too Much Debt:

   If debt is difficult to manage while earning a paycheck, it can be even more burdensome in retirement. Strive to reduce or eliminate debt before retiring.

8. It’s Not Only About Money:

   Health and well-being play a major role in your retirement happiness. Maintaining a healthy diet, regular exercise, and strong social connections can greatly enhance your quality of life in retirement.

There are many factors that contribute to a happy retirement. But one of the most powerful steps you can take today is putting a clear financial plan in place. It can help increase the odds of turning your retirement dreams into reality.

Looking for more resources to help you prepare? Explore our Financial Academy for expert insights, or connect with an advisor for personalized support.

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Investment advice offered through OneDigital Investment Advisors LLC.

Information is provided for educational and information purposes only.

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