Preparing The Nest

Five (More) Retirement Pitfalls To Avoid

Get on track financially — and stay there — with help from Women & Co., which reveals the following retirement planning mistakes to avoid:

1. Counting on your home value. Even if your home has maintained its value with the recent market turmoil, it may be difficult to extract the gains to fund your retirement. Your home may be one component of your overall plan, but you shouldn’t count on it to subsidize a significant portion of your retirement.

2. Not considering long-term care needs. Among people age 75 or older, women are 60 percent more likely than men to need help with one or more activities of daily living. You may want to consider long-term care insurance, which can help protect against using personal assets and savings to pay for long-term care expenses.

3. Investing too conservatively. While being too conservative may protect you from losing what you’ve invested, you take the risk of not having any real growth to your money. The average annual rate of inflation in the United States is 3 percent. At a minimum, your portfolio growth should keep pace with inflation.

4. Not diversifying your investments. Diversification can help you spread out investment risk and also make your portfolio less vulnerable to the ups and downs of a single holding or the market.

5. Not rebalancing. Consider regularly rebalancing your portfolio to keep it aligned with your risk tolerance, return objectives, and time horizon. Leaving your portfolio untended is sort of like leaving a toddler alone in a room with a hot stove — the outcome depends far too much on the forces of chance.

Source: Women & Co.