Avoid these common mistakes to increase the potential of reaching your retirement saving goals.
Having sufficient cash flow not only to retirement, but also through retirement, is a big concern for Americans today. In fact, roughly only one-in-four Americans feel very confident they will have enough money to live comfortably when they retire, according to a recent survey.*
The concern is certainly justified. After all, Americans are living longer than ever before, and the uncertainty of being able to maintain a lifestyle for 20, 30, or 40 years feels weighty.
While there's no single action that can increase your confidence if you're nearing retirement age, there are several key investment mistakes that, if avoided, can help to maximize your retirement savings and perhaps give you the confidence to retire with less financial stress. Steer clear of these pitfalls.
Mistake #1: Failing to Maximize Your Contributions. If you can afford to do so, contribute the maximum amount to your employer-sponsored plan if a match is offered. Put simply, a 401(k) match program is essentially free money for employees. If money is tight, start small at 1% and inch your contribution up at regular intervals as you acclimate to that commitment.
Mistake #2: Failing to Develop a Plan. Without a plan, it's difficult to understand whether your savings will support your living standard. Alongside your advisor, lay out clear, written goals that incorporate the number of years until your planned retirement. You can essentially back your way into your annual investment goals based on your timeline.
Mistake #3: Adopting a Short-Term Investment Mindset. The stock market fluctuates. Those fluctuations are woven into the fabric of our economy. So, in the short-term, there's a decent chance of price volatility. Therefore, selling off your holdings whenever the market drops is a sure way to incur losses that impact your long-term goals.
Mistake #4: Trying to Read A Crystal Ball. Attempting to time your investment decisions based on when the market might be at its lowest or highest is risky business and can lead to missed opportunities. Invest your money with an eye toward the long term for more stability.
Mistake #5: Putting All Your Financial Eggs In One Basket. Some investors make the mistake of investing in just one fund or asset type. If the market swings and impacts that one holding, your retirement savings may experience the same fate. If you diversify your risk over a mix of assets, potential losses during sharp market swings can be significantly diluted.
*Source: 2020 Retirement Confidence Survey Summary Report
Having sufficient cash flow not only to retirement, but also through retirement, is a big concern for Americans today. In fact, roughly only one-in-four Americans feel very confident they will have enough money to live comfortably when they retire, according to a recent survey.*
The concern is certainly justified. After all, Americans are living longer than ever before, and the uncertainty of being able to maintain a lifestyle for 20, 30, or 40 years feels weighty.
While there's no single action that can increase your confidence if you're nearing retirement age, there are several key investment mistakes that, if avoided, can help to maximize your retirement savings and perhaps give you the confidence to retire with less financial stress. Steer clear of these pitfalls.
Mistake #1: Failing to Maximize Your Contributions. If you can afford to do so, contribute the maximum amount to your employer-sponsored plan if a match is offered. Put simply, a 401(k) match program is essentially free money for employees. If money is tight, start small at 1% and inch your contribution up at regular intervals as you acclimate to that commitment.
Mistake #2: Failing to Develop a Plan. Without a plan, it's difficult to understand whether your savings will support your living standard. Alongside your advisor, lay out clear, written goals that incorporate the number of years until your planned retirement. You can essentially back your way into your annual investment goals based on your timeline.
Mistake #3: Adopting a Short-Term Investment Mindset. The stock market fluctuates. Those fluctuations are woven into the fabric of our economy. So, in the short-term, there's a decent chance of price volatility. Therefore, selling off your holdings whenever the market drops is a sure way to incur losses that impact your long-term goals.
Mistake #4: Trying to Read A Crystal Ball. Attempting to time your investment decisions based on when the market might be at its lowest or highest is risky business and can lead to missed opportunities. Invest your money with an eye toward the long term for more stability.
Mistake #5: Putting All Your Financial Eggs In One Basket. Some investors make the mistake of investing in just one fund or asset type. If the market swings and impacts that one holding, your retirement savings may experience the same fate. If you diversify your risk over a mix of assets, potential losses during sharp market swings can be significantly diluted.
*Source: 2020 Retirement Confidence Survey Summary Report
