Episode 29: What is the Biggest Retirement Mistake?
Have your question answered on the Money Wisdom Question Series!
Thank you for joining us for Episode 29 of our Money Wisdom Question Series, where we answer common financial and retirement investment questions. Today’s question is, “What is the biggest mistake people make in retirement?”
Too Much Investment Risk
I’m going to answer that question two ways. First, I’m going to discuss what happens before someone retires. Let’s talk about the “financial red zone”. This is five years before retirement and five years afterwards. Here, many people take too much risk with their investments. They get hit with a market downturn that severely impacts the amount of money they can spend.
Retirement is a fundamental change in life. What should happen is at least five years before you retire, you should make a fundamental change in your investment goals. This means moving from growth (growing assets as quickly and as much as possible) to preservation of principal and a reasonable rate of return. When you’re retired or when you’re getting close to losing your paycheck for the rest of your life, you don’t want to get into a situation where the market goes down 30-35% (this happens from time to time) and all of a sudden you have to cut your income.
Too Much Debt Before Retiring
One of the biggest mistakes we see people aged 45-50 make is that they take on too much debt. Furthermore, they don’t have a plan for paying off their debt. That could even mean taking on debt to pay for your kid’s college. I always like to say, if you sacrifice your own retirement to pay for your kid’s college, you’re going to end up living with your well-educated kids. Make sure your financial plan is taken care of first.
Don’t Sacrifice Your Retirement
For anyone at or above 60 years old, their biggest mistake is usually taking too much risk with their investments. For those under 50, the biggest mistake they can make is spending so much that you don’t save. Don’t sacrifice your own retirement.
Thanks for joining me and I hope you found this information helpful!
P.S. If you enjoyed this topic and want to learn more, download our offer, “Five Retirement Planning Mis-Steps to Dodge”.
P.P.S. Feel free to submit questions here for a chance to have them answered!
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Getting It All Together for Retirement
After a long, fulfilling career, the time has come to embrace the next chapter. You may have envisioned the age at which you’d retire since you began working, but it’s important to distinguish bet… -
Key Questions for Planning Your Retirement Income
Replacing your income in retirement is a significant undertaking that raises many important questions and requires careful planning. First and foremost, it’s essential to have a retirement income … -
Health Care Expenses in Retirement
Of all the expenses to expect in retirement, health care often makes up a significant portion of your costs. Monthly premiums, out-of-pocket expenses, and services not covered by Medicare can quic… -
Income Planning 101
You’ve spent the last few decades saving for retirement but are you truly prepared? To help address any concerns or uncertainties you may have, you need an income plan – one that considers every f… -
Frequently Asked Social Security Questions
Almost every American is impacted by Social Security in some way, so it’s no wonder that it’s one of the most frequently asked topics in retirement planning. When and how you start taking benefits… -
Maximizing Your Social Security Income
Social Security can serve as a safety net for many retirees, sometimes acting as a primary source of income. However, the program is highly complex with over 500 ways to claim benefits. Even one o… -
How Much Money Can I Spend in Retirement?
“How much can my spouse and I realistically spend in retirement at age 62 with $1 million saved?” Today’s hypothetical couple is asking the very question that most pre-retirees ponder when gearing… -
What Steps Should I Take If My Retirement Savings Fall Short?
One of the biggest fears today’s pre-retirees and retirees face is running out of money in retirement – but what happens when that once-distant fear becomes your reality? Today’s question addre… -
How Will I Receive Income from My Retirement Savings?
Today’s question centers around the core of retirement planning – how do I turn my retirement savings into retirement income? After decades of building up your nest egg, life after work introduces… -
What Should My Tax Plan Be at Age 65 with $1 Million?
Approaching retirement with $1 million saved is an impressive milestone, but turning those savings into a sustainable income stream requires careful planning. At age 65, many retirees face the cha…
