I want to talk to you about three very basic, but very common mistakes that will absolutely KILL your retirement. These are actually some of the 10 that I include with my FREE REPORT titled 10 Biggest Retirement Mistakes and How To Avoid Them which is available thru my website.
Now unfortunately these mistakes are not just ones that I made up or ones that I just read in another article or blog. These are mistakes that I have personally run into time and time again with folks. These are “tested in the trenches” mistakes that I personally have experienced weekly over the course of my long career in this great business.
Mistake # 1: Planning For Your Retirement When You Are Already Retired or You Are Not Ready to Retire.
This mistake is one that we see over and over again.
People getting “laid off” from a job they’ve had for years. Or taking advantage of the “early retirement” program offered so the state or their company can shrink their payroll. Or, people taking normal retirement at age 65. Or whatever reason.
We have people coming in here, constantly asking the same questions: “Do I have enough to retire? How much can I take out? Will I run out of money? Am I invested correctly?”
This is a big mistake! They have already made all their decisions about options. They have already taken their retirement plans and either had them distributed or receiving monthly payouts. They have made all their choices, and want us to tell them they’re going to be OK.
I’ve got some sad news.
Many of these people are not going to be OK, because they let the horse out of the barn. If I’m making any sense to you, you’ll see that waiting until you reach a certain age to plan for that same age usually doesn’t work.
In addition, one really big concern is thinking that just because you are receiving that package or you turn that magic age, you are ready to retire. One of the number one questions I ask clients and prospects who are planning to retire is this; “What are you going to do next?” This question is probably more important than the “Do I have enough money?” question.
Retirement is an awesome life stage. However, it can be very lonely or very boring if you have nothing planned to do next. Remember, you are going from a life of being very involved to one with very little to do unless you make things happen and get involved. I usually see depression or a feeling of low self worth around 24 to 36 mo into retirement from those that never had a plan of what to do next.
Mistake #2 is a HUGE. It Is Drawing Your Retirement Income from the Stock Market
This is one of the worst things that you can do and I see so many other financial advisors doing this as well as retired folks. Let me tell you why.
If you are drawing income form the stock market you can really hurt your portfolio during a down market and you know we have seen some of those. Why? Because in a down market when the price is lower, you have to sell more shares to take the same amount of money out. This decrease in shares may and usually does drive your balance too low for you to be able to recover.
Now I am sure that we have all heard the term dollar cost averaging and this is the same thing only in reverse. However, this isn’t called dollar cost averaging its called dollar cost ravaging. Because it often ravages and destroys your portfolio. Again this is very destructive and is especially a problem during periods of volatility. There are much better plans that provide income and still give you the potential for long-term growth.
Mistake # 3 is Not Planning for Longer Lives and Inflation.
Listen we all know that we are living longer these days. You might not feel like you want to but we are. And that’s great. There is nothing wrong with living longer as long as you have the finances to go with it. Knowing this, it is important to realize that a 65 year old couple has a 50% chance that one of them will live at least into their mid to late 90’s. An important question to ask yourself is this; do your current retirement plan and investments address this scenario?
In a related topic is inflation. Inflation eats away at the value of your money every year so you have to have more retirement income to buy the same amount of stuff. If you ignore inflation each year you will suffer a decline in your standard of living.
Now I have given you the 3 biggest and common mistakes, I have 7 more in my report which you can get for FREE. I hope that after viewing this presentation you have questions of which I am certainly here to answer. Let me know. E-Mail me at Richard@thefinancialqb.com or call my office at 407-622-6669.
If you are looking for a brief, plain-English introdution to investing, don’t forget to BUY my book, Dirty Filthy Lies My Broker Taught Me & 101 Truths to Money and Investing. Order my book now and I will also send you my Investor Awareness Guide and listen to our The Seven Deadly Investor Traps that Destroy Your Wealth and the Three Power Strategies to Fix Your Portfolio Fast! These materials will equip you with the information you need to begin putting your investment experience back on track.
Wealth and Business Planning Group, LLC (The Financial Quarterback™) is a Registered Investment Advisor in the State of Florida that provides Fee Planning and Asset Management. Depending on your state of residence, Wealth and Business Planning Group, LLC (The Financial Quarterback™) may not be able to immediately provide services. For more information go to www.thefinancialqb.com.