Today’s Prep:
Do you have a strategy in place to avoid these retirement planning mistakes? Eric talks through what to do instead to make sure your plan is a success.
Equipping Points:
Nobody likes making mistakes, but it happens from time to time. What are the biggest retirement planning mistakes that people make and what can you do to avoid them?
A major mistake many make is ignoring or forgetting the future tax implications of your retirement savings. The vast majority of people save in qualified plans like a 401(k) or 403(b) that grows tax-deferred. You need to have a diversity of incomes coming from different tax sources: taxable, tax-deferred, and tax-free. You may need to move money from one bucket to another. Roth conversions are an easy way to do that.
People who start Social Security too early may end up regretting this. There’s a lot of strategy that goes into choosing when to start Social Security. The best way to determine what to do is to have a Social Security analysis to compare your options as a part of a bigger plan.
Are you paying more attention to your returns than your retirement income needs? The returns are easy to focus on but remember that you have to take risk in the stock market. The income equals the outcome, which is why you need to focus first on the income needs. The trend of the market will vary but you need a consistent flow of income.
Your friends and family mean well, but taking their advice for financial decisions is not the same as getting advice from a professional. The clearer your objectives are, the clearer your goals are, then the better the planning process is going to be. An advisor is going to ask the tough questions that you need to face when making a plan.
Being too aggressive or too conservative in the market will be a problem. How do you strike the right balance? It’s important to remember that it changes at different points in your life. You need to find a strategy. A plan will help you see what tools and what strategies you need to make your plan work.
Listen to the entire episode or skip ahead to a particular mistake using the timestamps below.
1:01 – What are the top five retirement planning mistakes?
1:09 – Ignoring the future tax implications.
2:49 – Starting Social Security too early.
5:05 – Focusing on returns vs. the income needed.
6:56 – Taking advice from friends and family.
8:25 – You have to find the right balance.
Today’s Takeaway:
“The clearer your objectives are, the clearer your goals are, then the better the planning process is going to be.“
-Eric Peterson
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
The Stress That Comes With Retirement
Eric discusses why this phase can be so daunting and offers strategies to ease the transition.
Read More
Finding Financial Silver Linings
Throughout our lives, there will be times when the markets rise and times when we experience downturns. Largely, we don’t have control over the circumstances we’re dealt, but we do have control over how we respond to those situations.
Read More
Unasked Retirement Questions You Shouldn’t Ignore
Tune in to this episode with Eric, as he breaks down some frequently unasked retirement questions that are very important to consider.
Read More
The Diverse Definitions Of Diversification
Diversification is one of those buzzwords you hear often in financial planning. While many people know it’s important, few are clear on what it actually means when applied to various aspects of their financial strategy. In today’s episode, Eric and Marc will bring you the diverse definitions of diversification.
Read More
The Use Of Technology In Financial Planning
As technology keeps advancing, it’s made our lives easier in so many ways. Tasks that used to need outside help can now be done on our own with just a few clicks. This shift has also brought more accessible online financial tools, but how accurate and helpful are they really?
Read More
Retirement Planning Conversations With Dorothy Parker
Dorothy Parker is one of the great writers of the 20th century. Her wit and prose have been appreciated by readers for generations. But are there any lessons we can learn when it comes to finance with some of Parker’s most well-known quotes?
Read More
Mailbag: Moving To A State With Income Tax And More
In this episode, Eric is answering your questions! We’ll cover a range of topics today, including key considerations for income taxes when moving to a new state, how to initiate financial conversations with parents or grandparents, and whether using a life insurance policy to save for a college fund is a wise choice.
Read More
What Is Lazy Money?
What is lazy money and why do you want to not have too much of it in your retirement portfolio? Simply put, lazy money is money that isn’t growing as much as it could be. Having your money grow and work for you is a key part of building a solid portfolio, so Eric breaks down some strategies to help get the most out of your money in this episode.
Read More
Retirement Planning Today Is Harder Than It Used To Be
Retirement planning simply isn’t the same as it used to be. From changes in life expectancy, the lack of pensions, and getting caught in the sandwich generation, there’s a lot to keep in mind when putting together your financial plan. Instead of taking advice from others who may have retired in a different era, it’s important to understand what strategy is right for you.
Read More
Social Security Variables That Impact Your Claiming Strategy
After so many years of paying into Social Security, you might feel ready to reap the benefits. But before you get too eager, it’s best to have a thorough understanding of the different variables and how to best leverage them.
Read More