Top Five Financial Mistakes for Retirement

When planning for retirement, your finances are almost always your chief worry. Most of your planning should be regarding how you will financially stay afloat once you transition into retirement. Here are the top five financial mistakes you can make when planning for retirement:

5) Relying on Stocks
As we’ve seen in this current global financial crisis, stock markets are extremely volatile. A fortune in stock can be gone tomorrow. Many people lose their retirement money when the stock market went south. Part of your savings should be in stocks but not the majority.

4) Not Having Proper Insurance
As we age, insurance becomes more and more important. Health insurance, in particular, is vital. An illness prior to retirement can quickly eat away all the money you had planned to spend in retirement.

3) Not Being Patient
When planning for retirement, you shouldn’t panic. If some of your money is lost in the stock market, weather the storm. If your current finances get weaker, find ways to continue without borrowing against your retirement fund.

2) Accounting for Social Security
Will social security be there when you retire? None of us know that answer. When doing the math, you shouldn’t assume social security will still be around. It could disappear or the rates could be altered.

1) Not Starting Now
No matter your age, if you are working, you should start saving for retirement. Even if you think you are “too old” to start, starting right now will put you in a better position than if you keep procrastinating.

Where is your retirement money? (Image: Flickr)