When planning for retirement, the seemingly small financial decisions you are making right now can add up to major benefits in the future. It is no small feat to reach retirement with a healthy financial outlook, but this goal is likely achieved when you are actively investing, saving, and strategizing with a financial advisor.
Not only is it important to be proactive about the things that need to be on your to-do list for retirement planning, but you also need to know mistakes to avoid. Here are a few of the common pitfalls that could be slowing your progress for retirement planning:
Procrastinating Your Plans
The earlier you start, the easier it will be to prepare for retirement. No matter your age, do not wait to talk to a financial advisor. Retirement savings is similar to the Chinese proverb: “The best time to plant a tree was 20 years ago. The second-best time is now.” Whether you want to improve your retirement planning or you have not started yet, now is the ideal time to get going.
Overlooking Tax Advantages
The IRS offers personal tax benefits for people who are saving for retirement. You can reduce your current tax bills and set aside more money for the future by using specific types of retirement savings accounts. Talk to your financial advisor about different types of retirement plans, such as individual IRA accounts or 401(k) plans through your employer. The goal is to maximize your savings while minimizing your tax burden at the same time.
Not Maximizing Employer Contributions
Many employers offer retirement benefits, but employees do not always take advantage of these benefits. If possible, max out employer matching on your 401(k) and 403(b) contributions. These benefits make it possible for you to increase the amount of money that is going into your retirement investment.
Early Retirement Withdrawals
When money is tight and you are desperate for a little bit of cash to pay the bills, you might be tempted to dip into your retirement accounts prematurely. But this mistake can cost you a lot right now as well as in the future. Not only do you pay pre-retirement penalties, but it also takes away from the nest egg. Reducing your retirement savings has a domino effect and may decrease the amount that is available to you during retirement.
Personalized Financial Planning Services
What adjustments do you need to make to your spending habits right now? Our team at Bulman Wealth Group is here to answer your questions about retirement savings and help you create the ideal financial plan to prepare for the future. These comprehensive services are personalized for every client, giving you a custom approach that fits your unique financial situation. Call today!
Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an Investment Advisor in the State of California. Investment advisory services also offered through Retirement Wealth Advisors, LLC (RWA), an SEC Registered Investment Advisor. Bulman Wealth Group and RWA are separate entities, independently owned, and are not affiliated. Insurance products and services offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922.