Eight Mistakes That Can Upend Your Retirement
Pursuing your retirement dreams is challenging enough without making some common, and very avoidable, mistakes. Here are eight big mistakes to steer clear of, if possible.
- No Strategy: Yes, the biggest mistake is having no strategy at all. Without a strategy, you may have no goals, leaving you no way of knowing how you’ll get there—and if you’ve even arrived. Creating a strategy may increase your potential for success, both before and after retirement.
- Frequent Trading: Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then make adjustments based on changes in your personal situation, not due to market ups and downs.1
- Not Maximizing Tax-Deferred Savings: Workers have tax-advantaged ways to save for retirement. Not participating in your employer’s 401(k) may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.2
- Prioritizing College Funding over Retirement: Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.
- Overlooking Healthcare Costs: Extended care may be an expense that can undermine your financial strategy for retirement if you don’t prepare for it.
- Not Adjusting Your Investment Approach Well Before Retirement: The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Consider adjusting your asset allocation in advance of tapping your savings so you’re not selling stocks when prices are depressed.3
- Retiring with Too Much Debt: If too much debt is bad when you’re making money, it can be deadly when you’re living in retirement. Consider managing or reducing your debt level before you retire.
- It’s Not Only About Money: Above all, a rewarding retirement requires good health, so maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active.
- The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation and diversification are approaches to help manage investment risk. Asset allocation and diversification do not guarantee against investment loss. Past performance does not guarantee future results.
- Under the SECURE Act, in most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.
- The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss. Past performance does not guarantee future results.
Life Insurance at an Early Age
Perhaps you’ve heard the maxim, “Preparation is the key to success.” But when it comes to life insurance, knowing when to prepare is almost more important than the preparation, itself.
Sure, it can be difficult to think about life insurance as early as your 20s, but life moves pretty fast sometimes. Before you know it, you’ll be in your 30s and possibly supporting a family. Even if you have a different life plan, taking care of those who matter most is always a wise move.
Many consumers believe they simply can’t afford life insurance on top of all the other bills they pay at an early age. That’s a valid concern! After all, you should never engage in any sort of financial venture beyond your means.
Did you know the average cost of term life insurance for a 25-year-old is $31 per month?1
Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Insurance can be an intimidating topic, but it doesn’t have to be. Even if right now isn’t the best time to purchase life insurance, discussing the future is a smart move.
1. ValuePenguin.com, July 22, 2025.
Happy 250th, America!
This July 4th is a milestone year!
It’s our nation’s 250th birthday.
While you’re out enjoying a BBQ with friends and family, here’s a fun story to tell everyone about our oldest Founding Father, Ben Franklin.
When he died in 1790, he left the cities of Boston and Philadelphia with roughly 1,000 pounds each. For the first 100 years after his death, half of the proceeds were used to make low-interest loans to tradesmen. The rest had to remain for another 100 years.
When the money came due 200 years after his death, Philadelphia had $2 million and Boston $5 million.
“Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turned is six, turned again it is seven and three pence, and so on, till it becomes a hundred pounds. The more there is of it, the more it produces every turning, so that the profits rise quicker and quicker,” wrote Franklin in his 1748 essay “Advice to a Young Tradesman.”