Top 5 Retirement Planning Mistakes To Avoid

Planning for retirement is one of those things that most people know they need to do but don't know where to start. However, if you want to be able to retire at a decent age and enjoy your golden years, it's important to have a solid retirement fund set up and to contribute to it regularly. Specifically, there are also a few common retirement planning mistakes you need to avoid.

Not Accounting for Inflation

When you calculate how much you'll need to have in your retirement fund to live your desired lifestyle, don't forget to account for inflation as well. This is a very common mistake people make that can lead to their numbers being tens of thousands of dollars off down the road.

Waiting to Get Started

It's literally never too soon to start a retirement fund. Even if you can't contribute much right now, you'd be amazed at what a difference a little bit of compound interest can make. If you don't have a retirement fund because you don't have a lot to contribute at this point in your life, open one anyway and just contribute what you can afford--no matter how little.

Not Knowing the Regulations

Different types of retirement accounts have different regulations in terms of taxes and when you can withdraw, so make sure you're aware of these when you open yours. The last thing you want is to try to withdraw from your account five years early and end up being hit with huge penalties and fees for doing so.

Not Taking Advantage of Employer Matching

If you have an employer that offers contribution matching for your retirement fund, always take full advantage of this--even if you don't anticipate being at the job for many years. There's a good chance you can still rollover your funds from that account to a new retirement account.

Choosing the Wrong Type of Fund

Take your time researching the various types of retirement accounts out there and ultimately choose the one that's best for you based on your expected contributions, income, and expected retirement age. The goal is to make your money work for you as much as possible, and this begins with having the right account open.

By avoiding these mistakes as you plan for your retirement, you'll be able to enjoy a more fruitful lifestyle and avoid future problems once you hit your ideal retirement age.

For more information and retirement planning advice, talk with insurance brokers, such as those at Alliance Insurance Brokerage.