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TheStreet Open House

5 Retirement Mistakes that Will Haunt You

BOSTON ( TheStreet) -- "You'll regret it. Maybe not today, maybe not tomorrow, but soon and for the rest of your life."

Those words, spoken on a tarmac at the finale of the classic film Casablanca, could be stretched from the intended affairs of the heart to how we plan for retirement.

Those planning for retirement must be able to recognize and avoid financial moves that could bring long-lasting regret.

There are financial decisions we make that seem a good idea at the time, retirement moves we make half-heartedly and needed pans we sweep under the carpet. When it comes to ensuring a lifetime of retirement income, bad decisions may not hurt immediately, but once the pain arrives it can last for decades.

Here are five retirement mistakes that will haunt you, and ways to avoid the haunting entirely:

1. Guesswork, not legwork
How much will you need to retire?

That straightforward question should be a starting point for people of all ages, at all stages of planning. A great number of people, however, do no more than guess at what they should save.

According to the Transamerica Center for Retirement Studies, a nonprofit organization funded by Transamerica Life Insurance, half of workers continue to guess at the amount of money they need to save to feel financially secure when they retire and a large number (44%) of American workers do not have a strategy to reach their retirement goals.

Of those who do have a strategy, only half have factored in health care costs and one-fifth have factored in long-term care insurance, making their estimates inadequate. A reduction or loss of Social Security benefits ranks third in greatest retirement fears.

As part of its research, Allianz Life asked a segment of baby boomers how much money they thought they would need to live on.

"The average number they came up with was $60,000," says Katie Libbe, vice president of Consumer Insights for Allianz Life (AZ). "Then we asked them to try to calculate what that means in terms of a portfolio that's going to deliver that for as long as they think they are going to be in retirement. They were at a loss in terms of what they would need. They said $500,000 when, if you just apply a 4% withdrawal to that portfolio, they would really need $1.5 million. They don't know how to do even this basic calculation. You can teach them about some of these individual tactical mistakes, but they can be off even in the strategic sense of how much money needs to be socked away."

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