Recent Trends in Human Resource Management

Wednesday, March 12, 2008

Top 5 Retirement Planning Mistakes

It is never too soon to start putting away money for your retirement. Today, there are several options available, including IRAs and 401(k) plans, both of which are popular and help grow money for retirement tax-deferred. While most of us are aware of retirement plans, and in many cases have started saving money, there are several common mistakes that slow down the retirement planning and savings process. Here are the top 5.

1. Not taking advantage of time. The earlier you start, the more your money will have time to grow in your retirement accounts. Too many people make the mistake of putting off starting a retirement savings plan.


2. Not investing regularly. Many people start investing and then stop. If you do not invest on a regular basis, you cannot expect your retirement savings to grow.


3. Not taking full advantage of tax-free retirement accounts. The more you put into tax-free retirement accounts, the more money you can grow tax-free. If you can afford to put in the maximum contribution to your retirement accounts each year, you should do so.


4. Poor asset allocation. If you are investing too conservatively, you may not be able to build the amount you are hoping to have for your retirement years. Conversely, if you are getting close to retirement and are investing in high-risk investment vehicles, you may lose much of what you have worked so hard to save. How you allocate your assets is more important than what you select within a given asset class.


5. Not creating a post-retirement plan. As you approach retirement you should determine how much money you will need and establish a plan for handling your money during your retirement years. This would include knowing all of your income sources, including investments, Social Security, and pensions.

6 comments:

Marlon said...

Hello,

The articles seems to place the onus upon the worker to make the decisions on retirement, which is fair. I am desirous of knowing what is the organization's role in preparing its workers for retirement.

PEO Services said...

Good article on retirement planning and yes today, there are several options available but many people make the mistake of believing on Social Security and your company's stock.

Professional Consultant said...

Thanks a ton dear followers.

I want to make this blog a success ans would require help to do so.

The idea of running this online forum is to make it a ready reference for its followers for the long time.

Please suggest some topics for discussion.

Rgds,
Ankur

Neil Fiorenza said...

Thanks for the tips, Ankur. This could be one of the resources that the people here need when they reach the point of retirement. There are a lot who seek for advice on how to save enough for their post-retirement money. Some would even continue to work after retirement.

Drew Harrison said...

If you're saving for retirement, you should definitely start early. The earlier you start, the bigger the ending gets. Starting early is also going to help you in case inflation happens.

Professional Development said...

Professional development courses are not just relevant for people in the field of business management, but are equally important for other professionals like teachers, medical practitioners, engineers and technicians. Some professions also associate accreditation with these courses, and use it as a yardstick to measure a person's competence.