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7 Retirement Mistakes to Avoid

| December 27, 2021

Not monitoring your withdrawal rate

Your withdrawal rate can be one of the largest factors in determining if your nest egg will last your lifetime and the quality of life you will have in retirement. It is important to monitor your withdrawal amount as your account balance and income needs fluctuate.

Not having a realistic view of inflation

Many fail to recognize the tremendous impact inflation will have over time on their expenses.  You need an income stream that can increase as the cost of living increases over the years.

Not having a diversified portfolio with a plan for market downturns.

Depending on your risk tolerance and your income needs, you should consider having a good mix of stocks, bonds, money markets, and possibly alternative assets. You should seriously consider if your portfolio is structured for income and how it might be positioned for a market downturn.

Not correctly rolling over your 401(k)

To avoid paying the mandatory 20% withholding be sure to complete trustee-to-trustee transfer to an IRA. Direct distributions require the full distribution plus withholdings to be contributed to an IRA within 60 days to avoid potential taxes.

Not keeping beneficiaries updated

It is important to review your estate plan. Do you need your spouse, children, trust or another entity to be the beneficiary?  Once you make this selection, you need to keep it up to date as your situation could change.

Not taking your required minimum distribution (RMD)

At age 72 you need to take your RMD.  If you do not take the distribution you will pay a 50% penalty on the under-distributed amount.

Not having a realistic view of longevity

At age 65, a woman can expect to live to age 85 on average, and a man to age 83. It is important to keep in mind half of the population will live beyond this and plan accordingly.