Retirement Planning Mistakes to Avoid

Planning for retirement is necessary.   Contrary to popular belief, Social Security was never intended to provide full time income or maintain a lifestyle after retirement.   Although many different retirement plans exist, the most common mistakes are made over and over again by Americans planning for retirement.    Avoid these mistakes and set a more solid foundation for those retirement years.

1.  Expect inflation.   Inflation affects prices today and will tomorrow.   Most financial analysts expect inflation to increase over the next two to three decades.   The cost of living will increase accordingly to double or triple current rates.    Inflation will impact finances, especially for those on a fixed income.   Pre-planning to allow for inflation rates can protect seniors by providing an adequate supply of money to foot the bills despite rising inflation costs.    By putting away two to three times more than needed for the current economy, a secure future can be assured.

2. Don't count on  investment returns allow to cover financial needs.    Many people believe that if they build a substantial nest egg and then can live off the dividends or interest payments.   This theory is sometimes sound but it depends on the investments.   Today's stock market is precarious and can destroy a carefully planned financial foundation with a single market fluctuation.   If investing, do it in real property or sound investments that are not as related to economical surges or downfalls.   And, it's wise to remember that investments, dividends, and interest payments may provide a financial foundtaion but dealing with them can create headaches for the heirs.