This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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."

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs