Don’t Make These 12 Common Retirement Planning Mistakes!

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Hunter going over biggest retirement mistakes.
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TRANSCRIPT: 

Pull out your financial plan! Let’s review the common mistakes to avoid in retirement planning and make sure you have them covered. Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies, here to help set you up for a successful, stress-free retirement while spending more and avoiding being killed in taxes. Whether you’re a DIYer or previously received a financial plan in the past, it may not cover some common mistakes I’ve seen in the industry.

Here are some of the common mistakes that I’ve seen:

Mistake Number One: Putting all of your eggs in one basket. For example, for my fellow small business owners watching this, assuming the sale of your business will cover your retirement. Your business is your baby. The problem with that is you probably think that your baby is worth more than the market is willing to pay.

Mistake Number Two: Not accounting for taxes in retirement. Uncle Sam is patiently waiting to take anywhere between 0% and 50% of your retirement, social security, pension, annuity, work income, and/or sale of business. Include proactive tax planning in your retirement plan.

Mistake Number Three: Assuming you will be physically capable of working throughout your retirement, or assuming you will want to, or assuming you will enjoy or be capable of running your rental properties.

Mistake Number Four: Not preparing your legacy estate in a timely manner. It’s never too early to plan your estate, but it can be too late. Establish and plan your legacy goals and wishes when you are capable. We typically review estate documents and beneficiaries yearly.

Mistake Number Five: Not accounting for inflation. The average retiree will see the cost of living increase about 2 and 1/2 times during a 30-year retirement. Plan to generate retirement income that increases with inflation, AKA purchasing power, not a fixed dollar income.

Mistake Number Six: Not spending enough. Believe it or not, people who work their entire life saving often have trouble feeling comfortable flipping the switch to spending. You’ve worked your whole life for this; build a plan tailored to you so you can comfortably spend and enjoy retirement.

Mistake Number Seven: Spending too much money. On the flip side, spending too much can leave you dependent on the state or your family in retirement, with no way of going back to work. Build a plan, like our guardrails and buckets approach to retirement income, to ensure that you can spend your money without running out of money.

Mistake Number Eight: Not creating a strategy for claiming Social Security. Social Security is the backbone for many retirement income plans, but not properly strategizing your Social Security can have you leaving tens to hundreds of thousands of dollars on the table. We’ve done videos on this in the past; you can find the link in the description below and make sure you’re subscribed to our YouTube channel so that you can catch the latest video.

Mistake Number Nine: Not retiring to something. People often retire just for the sake of quitting their job. In the worst cases, this can lead to severe depression in retirement. I want to see you retiring to something, not from something, so make sure when you build your plan you’ve taken the time to turn off your phone, close your eyes, and envision retirement. What will you do? Your day-by-day activities.

Mistake Number Ten: Not having a plan for long-term care. Somewhere around 50% of people will need some type of paid long-term care. A plan can be excessive savings or a long-term care insurance plan or a reverse mortgage strategy, but have a plan.

Mistake Number Eleven: Not having a plan for drawing down assets in a bear market. It’s not necessarily bear markets that kill portfolios; it’s having to sell holdings and take withdrawals during a bear market. Doing this, especially toward the beginning of your retirement, can kill your retirement plan. Build a solution for retirement income during bear markets, like our bucket strategy, which diversifies and allocates cash-like holdings, income-like holdings, and growth-like holdings to match your income needs so that you can still make withdrawals during a bear market and limit the permanent loss to your portfolio.

Mistake Number Twelve: Being the bank of mom and dad. I understand you want to take care of your kids, but you dialed in a retirement income number with our guardrails approach to income. You do have buffer zones for larger purchases and withdrawals, but constantly withdrawing more than your portfolio can handle will throw your retirement plan off. You’ll have no choice but to eventually take less income for yourself and reconsider your retirement goals.

Taking Action and Planning Ahead: Take action! Measure up each one of these to your retirement plan. If you don’t have these covered, have your financial plan updated. Lastly, subscribe to our YouTube channel. I’m Hunter Brockway, founder of Boca Retirement Strategies. If you would like a personalized financial plan to get the most out of retirement without running out of money, you can book at no cost, no obligation call on our website at bocaretirement.com or email us at contact@bocaretirement.com. We are based in South Florida, Western Massachusetts, and work with clients scattered throughout the US. Enjoy your successful retirement, and thank you for watching. Bye!

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