The Top Retirement Planning Mistakes to Avoid

Retirement is intended to be the ultimate reward after decades of working hard every single day. Most people save for years so they can spend their golden years doing what they really love. Unfortunately, it’s easy to make a poor decision that could put your retirement at stake. You could find yourself working for another decade to avoid facing poverty or having to depend on your loved ones for financial support.

To help you get the most out of your freedom, here are the top mistakes to avoid when planning for retirement:

Failing to plan

It doesn’t matter if you’ve just started at your first job after graduating college or if you’ve been with the same company for 30 years, it’s best to start planning for retirement as soon as possible. Many young workers put off establishing a retirement plan because they figure it’s too soon. Don’t get caught 10 years before you’re set to retire without a game plan.

Set a financial goal and then consult a financial planning service in Des Moines, IA on the best ways to achieve that number. No need to be concerned if your financial status changes over time—your monthly contribution can easily be adjusted as your income fluctuates throughout the years.

Underestimating your retirement needs

You might be surprised by how much money you actually need for an enjoyable retirement. The best rule of thumb is to budget for approximately 80 percent of your annual household income for each year of retirement to maintain your same standard of living. But remember that amount is to live exactly how you do now. You’ll want to increase your goal if you plan to travel, buy a second home or eat out often. Don’t forget to also factor in health care costs, which tend to increase with age. Consult a professional accountant to get a better picture of how much money you’ll actually need for your ideal retirement.

Thinking planning stops with retirement

Retirement planning doesn’t stop just because you’re no longer working. In fact, it’s actually even more important to re-evaluate your plans once you retire. It’s crucial that you continue to monitor your finances, savings, expenses and health care costs to avoid running out of money a decade into your golden years. It’s best to meet with your financial advisor at least once a year so you can adjust your spending and investments accordingly.

It’s never too early or too late to start planning for your retirement. The retirement experts at Accounting & Tax Professionals, PLC will help you develop a financial goal and determine the best way to achieve it. By consulting a professional, you will have the peace of mind knowing that you will actually be prepared to leave your job and truly enjoy your retirement without having to worry about finances. Call us today at 515-986-5843 to get your finances in order.

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