Mistakes in your retirement plan can have a big impact on your future retirement income. The good news is that there are relatively simple solutions to these kinds of mistakes. The key is to identify these mistakes before they’ve had time to become problems. Once you’ve identified them, you can take the appropriate measures to get back on track. In fact, using your financial advisor as a sounding board and involving your loved ones can help fix the following 6 common retirement mistakes.
A Do-It-Yourself Mentality
Many investors have a knack for taking care of themselves, whether it’s installing a new bathroom floor or investing on their own, but this do-it-yourself mentality can backfire when it comes to your retirement investment plan.
Your financial advisor should walk you through your investment plan, act as an unbiased sounding board and filter market information and news for you. This is a great step helping you reach your goals and maximize your retirement income. They should be able to offer you comprehensive wealth management strategies as well.
Not Having a Formal Investment Plan
It’s difficult, if not impossible, to achieve a goal you have not set. To help ensure adequate retirement income, you need a detailed retirement plan. This should be much more than a 4-page generic plan in which a financial advisor plugs in a few personalized facts and figures. Your formal investment plan is a dynamic tool that takes into account factors such as inflation, increases to health care costs, your goals and rate of return on your investments. To go without such an investment plan is to leave too much to chance.
Being Too Conservative With Your Investments
Once you retire, you may start thinking that it’s time to re-allocate to more conservative investments, but the truth is that your hard-earned money needs to last another 20 to 30 years! Being too conservative after you retire can seriously diminish your income later on.
Your financial advisor can help you to plug your post-retirement time frame into your investment plan and figure out an appropriate asset allocation in order to help you meet your goals.
Not Maximizing Social Security Income
Social Security is not a one-size-fits-all program if you learn to take advantage of certain strategies. By delaying the collection of benefits until you are 70, you can increase your benefit amount, thus increasing your overall benefits in the long run.
You can maximize your social security benefits in several other ways, including the File-and-Suspend Strategy and the Restricted Application for Spousal Benefits. Speak with your financial advisor about which strategies are appropriate for your situation.
Not Involving Family Members
Many families have traditions of not speaking openly about finances, but it’s important to be direct about these matters, especially if they’ll have to manage the finances at some point.
When you speak with family members about your retirement plan, make sure they know where your accounts are held and who your CPA and lawyer are. Having your financial advisor lead the conversation is a good way to get started on this.
Failing to Assign or Update Beneficiaries
After you’re gone, the assets you’ve worked hard to care for and accumulate have to go somewhere, so you may as well decide who will inherit them. If you fail to do so, your family could face complicated legal issues, and this can drag on far too long.
Your financial advisor can help you to keep your beneficiaries updated and make sure that your affairs are in order.
With the help of your financial advisor, you can avoid these 6 common retirement mistakes. Call one of our Wealth Managers at (800) 541-7774 to create an investment plan and discuss various wealth management strategies. Alternatively, you can get started on your investment plan by answering a few short questions here.
