6 Common Retirement Mistakes

By Heather Taylor0 Comments

Many recent retirees and those about to leave the workforce, are learning the hard way that it pays to plan. Where long term goals are just as important as regularly implemented strategies, the price one pays for falling into a “retirement pitfall” can be grievous.

An article from Forbes.com illustrates six retirement savings pitfalls that are crucial to avoid. The fifth mistake has a lot of bearing on the importance of a self-directed IRA:
5. Not Being Truly Diversified Most people can recite with ease the three basic asset classes within a retirement portfolio: stocks, bonds, cash. But they may either ignore the need to further diversify within the stock and bond categories—or may not even realize what it means to be truly diversified beyond those basic building blocks.

 

Case in point: You may have stocks spanning a variety of sectors—technology, health care and financial services, for instance—but if all those are U.S.-based stocks, you’re not as diversified as you think. If you’re not sure how to allocate your portfolio, talking to a financial planner can help.”

Diversification doesn’t necessarily mean investing in everything under the sun, but it can include the important power of choice. Having the right vehicle to invest with, so that you can plan out your investments in the way that best suits your goals and skills is key to wise diversification.

Another pitfall that the article discusses is “having no clued how much you need to save for retirement.” Working closely with a financial professional or tax advisor can be crucial in determining what your retirement savings goals should be and best to meet them. One thing is certain, those who plan ahead, reap the rewards later.