The equation for the preparation for retirement has never changed: save early, save often, and be smart with your investments. The equation for retirement itself has never changed: be smart with your money, enjoy life, but do nothing in excess. So, why do we constantly see articles like this one about 9 Retirement Killers as if they are a huge surprise? Half of the nine killers involve spending your money too quickly or beginning your withdrawals too early, to that I respond: “duh!” Another retirement killer involves paying too much for advice or having the wrong asset allocation, yet another “duh!” Here are the nine “killers,” I’ll boil it down to only three.
- Cracking your nest egg before retirement.
- Spending your retirement money way too early.
- Having no clue about how much to save.
- Spending your retirement savings too fast.
- Not giving a hoot about asset allocation.
- Letting Uncle Sam eat your retirement.
- Depositing your retirement in your fatty deposits.
- Paying too much for help.
- Retiring permanently when you really just needed a break.
Here are my three real killers:
- Failing to plan (and execute that plan) for retirement – Spending too much, spending too early, not sure how much to save, and not focusing on asset allocation speak to one over-riding failure, the failure to plan for your retirement. If you have a plan, you won’t spend too much and too early. If you have a plan, you’ll know how much to save and you’ll properly align your assets to your needs. Those who plan are forced to think through all of these questions, people who do not plan will approach them haphazardly and are more likely to commit one of these deadly sins.
- Don’t misplace your trust – If you are going to get an adviser, be sure you trust them 100% before you hand over the keys to your retirement castle. If things sound too good to be true, vet the person or the plan out with every other person you trust, regardless of their background. If you trust one of your good friends and they know nothing about money, that’s fine… they know you and they have a fraud detector too. You’ve waiting this long for retirement, you can wait a few more days.
- Remember to enjoy retirement – This is one of the big issues appearing now that there are so many retirees. After 40 years of hard work, of 9-to-5 days in the office, of 9-to-5 days in the shop or the store, it’s hard to turn it off and expect someone to enjoy just sitting on a beach or sit in front of the television. This is in part linked to killer #1, the failure to plan, but this is a little bit more. Remember to enjoy your life, fill it with things that are more important than income producing, and you won’t fall into the “boredom” trap many retirees are now facing.