Avoiding The Most Common Retirement-Planning Mistakes with Mark Biller

It’s said that we learn from mistakes, not success…but do you want to experience that with your retirement savings?

No question, saving and investing for retirement is something you want to get right the first time. Mark Biller joins us today to help you avoid some of the most common retirement planning mistakes.

Underestimating the Impact of Inflation

One of the most common retirement-planning mistakes is underestimating the impact of inflation. Many fail to grasp the destructive power of inflation’s compounding effect over time. For example, with a 3% annual inflation rate, a lifestyle costing $75,000 today will require $135,000 in twenty years. Understanding this helps retirees plan for sufficient income to maintain their standard of living.

Investing Too Conservatively

Another common mistake is investing too conservatively. While fixed-income instruments like CDs and bonds are important, they often do not keep pace with inflation. Retirees need to ensure their portfolios continue to grow by maintaining some exposure to stocks and equities to stay ahead of inflation.

Overestimating Investment Income

A realistic retirement plan should be conservative about projected returns. Withdrawing too much money too soon from retirement accounts can create problems later, especially with increased life expectancy. The general guideline is to withdraw no more than 4% annually from your portfolio, but this can vary based on individual circumstances.