Here are some ways you might encounter retirement issues:
1. Ignore your long-term strategy
Have you ever taken the time to develop an investment philosophy based on your goals, personality and risk level? If you have, do you stick to your strategy, or do you let your emotions take over when the market is crazy? The reality is that the market is fluctuating every day. If you try to beat the market and get the headlines, you will not only put unnecessary pressure on yourself, but taking action on your emotions can hurt your savings.
The 2015 Dalbar study showed that market competition led to poor performance. Buying high and low prices due to panic will reduce your overall return and may jeopardize your retirement. What should you pay attention to? Maintain a long-term vision and a rigorous attitude, refuse to ride a roller coaster.
2. Misjudge your retirement needs
You may be proud of yourself by accumulating nest eggs. But even if you save a million dollars, it may not be enough. If you plan to retire at 62, your retirement savings will take 30 years or more. Needless to say, you will incur additional costs such as health care costs, home maintenance and taxes. The best way to avoid financial stress during retirement is to set up a contingency fund to deal with unexpected situations and work with your financial advisor to develop a variety of retirement plans to understand what your savings can do. Then find ways to maximize your savings and give yourself a buffer.
3. Failure to take the required minimum allocation
If you are 701⁄2, you must get the minimum required allocation [RMD] from a traditional IRA and an employer-sponsored retirement account. If you need money to reach this age, you must follow the RMD rules. What if you don't follow it? The US Internal Revenue Service will charge you a 50% over-accumulated penalty! This can seriously damage your retirement savings. For example, if you are asked to withdraw $5,000 instead, then you will owe up to $2,500. This is an unnecessary and avoidable loss. Depending on how much you are in the contingency fund, you may even be forced to use your retirement savings to pay a fine that further damages your future financial situation.
4. Engaging in dangerous behavior
When you start saving for retirement, you may be in a very different stage of life. As the years go by, do you take the time to reassess the level of market risk you are familiar with? Although you cannot completely eliminate the risk of a portfolio, you can ensure that your investment is in line with your risk tolerance.
At this point in your life, you need to focus on finding the right balance between the right mix of market volatility and knowing that your money will wait for your safety when you retire. This balance is unique to everyone, so don't copy the strategies around you. If your portfolio is too biased towards either side, this could mean the difference between retirement success and exhaustion of funds.
5. Get advice from the wrong source
When you don't work with trusted financial professionals, you put money in a dangerous place. At this point in your life, you need to work with a consultant who will help you create a written income plan and complete a variety of retirement plans, not just to help your money grow.
Orignal From: Five common ways people lose their retirement savings
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