Provided by Taylor McClish
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. (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.)
Not
Maximizing Tax-Deferred Savings. Workers have
tax-advantaged ways to save for retirement. Not participating in your workplace
retirement plan may be a mistake, especially when you’re passing up free money
in the form of employer-matching contributions. (Distributions from most
employer-sponsored retirement plans are taxed as ordinary income, and if taken
before age 59½, may be subject to a 10% federal income tax penalty. Generally,
once you reach age 70½, you must begin taking required minimum distributions.)
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
Health Care 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. (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.)
Retiring
with Too Much Debt. If too much debt is bad when you’re
making money, it can be especially harmful 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.
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All indices are unmanaged and
are not illustrative of any particular investment.
Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.
Citations.
1 - theweek.com/articles/818267/good-bad-401k-rollovers
[1/17/18]