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Six Ways to Ruin Your Retirement

Wednesday, May 1, 2013 6:55 AM

Despite the plethora of websites, books, magazines, advisors and other financial information and services available for retirees, there will always be a contingent of people who fail to make their retirement savings last for the rest of their lives. There are many ways to avoid this, some of which are more proactive while others are reactive in nature. But none of them are particularly difficult; all any of them really require is discipline and common sense.

Investopedia are a few ways you might be endangering your retirement.

1.Too Much Risk. You worked and sweated for years to accumulate enough money to be able to live a comfortable retirement. Therefore, this is probably not money that you want to use to start trading commodities futures contracts unless you are very experienced with them.

2.Too Little Risk. This mistake can be every bit as costly as the previous one; those who invest their portfolios too conservatively may find that their expenses are outgrowing their income.

3.Retiring Too Early. Early retirement has become something of a status symbol among the upper-middle class. However, early retirement can be disastrous for those who are not adequately prepared for it.

4.Failure to Plan for Long-Term Care. Nothing can destroy a retirement portfolio like having to pay for the cost of a nursing home or other long-term care without any kind of insurance protection.

5.Retiring All At Once. For some people, the radical adjustments that come from retirement are too much to absorb all at one time. It may be necessary to work another, lesser job for a time, such as a part-time job with an employer in a field in which you have an interest. A few years of this type of work may allow you to gear down sufficiently to total retirement at some point. This strategy can also help to stretch an insufficient retirement portfolio a long way.

6.Living Beyond Your Means. As obvious as this is, those who spend more than they have in retirement will find themselves in dire straits at some point. Run the numbers carefully before you buy that 54-foot yacht or that vacation home.

These are just some of the ways that you can ruin your retirement if youre not careful. Those who think that Social Security alone will sustain them in retirement are also in for a rude surprise.

Helpful Resources: The Texas Credit Union Leagues (TCUL) IRA Basics and IRA Advanced seminars May 9-10 in Houston. Presented by Deborah Crawford, the IRA Basics seminar covers the basic elements of IRAs, while the IRA Advanced seminar explores everything you need to know about IRAs, including compliance, auditing and reporting. For more information, please visit the Training & Events section of TCULs web site, at https://www.tcul.coop/IRA_Seminars.html.