Prevent common financial management planning errors people make in saving and in retirement

woman holding jar with coins, savings written on sticker on jar.

During your working years, it's crucial to be mindful of certain financial management planning errors that can hinder your savings and retirement plans:

1. Maximizing company match programs and saving enough: Ensure you take full advantage of any employer matching programs and strive to save an adequate amount for your retirement.
2. Avoiding loans or cashing out from your retirement plan: Resist the temptation to take loans from your retirement accounts or cash them out prematurely, as this can have long-term consequences.
3. Diversifying investments to match your risk tolerance: Don't overlook the importance of diversifying your investments based on your risk tolerance and financial goals.
4. Regularly revisiting and balancing your portfolio: It's essential to review and rebalance your investment portfolio periodically to ensure it aligns with your changing needs and market conditions.
5. Overcoming fear and taking action: Don't let fear hold you back from making necessary financial decisions. Take proactive steps towards securing your financial future.
6. Planning for healthcare costs before turning 65: Be proactive in planning for healthcare expenses, especially if you'll be retiring before reaching Medicare eligibility at age 65.
7. Delaying retirement until you can afford it: Consider waiting until you have sufficient financial resources to support your desired retirement lifestyle, avoiding the risk of financial strain.
8. Creating a retirement road-map: Develop a comprehensive retirement plan with clear goals, objectives, and strategies to guide your financial decisions.

Transitioning into retirement comes with its own set of challenges. Here are some mistakes to avoid during this stage:

1. Adjusting to living on a fixed income: Prepare yourself mentally and financially for the transition to a fixed income during retirement.
2. Accounting for inflation: Take into account the impact of inflation over the potentially long duration of your retirement. Even a modest inflation rate can erode your purchasing power.
3. Realistic income and expense estimates: Be conservative when estimating your retirement income and consider potential higher expenses related to entertainment, travel, or healthcare.
4. Balancing equity and conservative investments: Recognize that the traditional 80/20 or age-based portfolio allocation may not be appropriate anymore, given the longer life expectancy in retirement. Seek growth opportunities while managing risk.
5. Optimizing Social Security benefits: Carefully evaluate the optimal time to apply for Social Security benefits to maximize your lifetime income.
6. Seeking guidance from a retirement financial advisor: Collaborate with a knowledgeable retirement financial advisor who can provide personalized guidance and support throughout your retirement journey. 
By avoiding these common mistakes and seeking professional advice, you can better navigate the path towards a secure and fulfilling retirement. If you have additional questions, visit our FAQ and Instagram page to learn more!