Do This, Not That

Common mistakes to avoid when planning for retirement.

Photo courtesy of Miye Wire

Members of the Miye Wire team in Reston are (left to right): Katelyn Murray, Miye Wire, Maynur Karluk.

Time flies when you’re busy working, so retirement could sneak up on you before you know it. You don’t want to be caught unprepared, so take a step back and consider whether you’re in danger of making one of these common retirement planning mistakes.

Not preparing emotionally.

“It’s the biggest mistake,” says Steve Cassaday, CEO of Cassaday & Company, Inc. in McLean. “Work defines some people, so there needs to be a plan for maximizing what you do that brings you joy.”

Not properly diversifying.

Supplementing your accounts with more than just income is a must. “What they need is cash flow,” says Cassaday, “which is generated by harvesting a portion of the total return of the portfolio through a rebalancing process. We believe nontraditional, more risky allocations that do not rely totally on income … are the optimum way to generate retirement cash flow.”

Not taking full advantage of employer-provided benefits.

“If you have a 401(k) at work, make sure you’re always contributing at least the minimum to be eligible for a company match, which is free money. Over time those company matches add up to substantial savings,” says Ric Edelman, founder of Edelman Financial Engines. 

Starting too late.

If you haven’t begun saving, start today. On the other hand, says Katelyn Murray at MiyeWire in Reston, don’t “be too aggressive with your portfolio right before retirement.”

Not having a comprehensive, long-term plan.

“Spend some time visualizing what retirement will actually look like for you,” says Murray. “Having a clearer picture of your retirement will help motivate you to save more and direct your money towards the things that really matter.”

Cassaday.com, EdelmanFinancialEngines.com, MiyeWireLLC.com

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