Looking for a little something extra to beef up your open enrollment materials? Then check this out.
The experts at FinancialPlanners.net recently compiled a list of the five biggest mistakes employees make when planning for retirement.
It’ll make a perfect complement to your existing retirement plan materials. And No. 4 may just give your employees the extra nudge they need to enroll in your retirement plan — or bump up contributions.
Here’s a quick rundown of the biggest pre-retirement blunders:
- Not paying off debts. Credit card debt, mortgages and car payments will quickly eat into savings. It’s also easy to overlook the toll credit card and car expenses/interest can take on retirement savings.
- Failing to get enough insurance. Sure, once they’re over 65 they can collect Medicare, but that won’t cover everything. Some things retirees need to make sure they can afford — hearing aids, eye glasses and long-term care.
- Forgetting about inflation. The spending power of retirees’ savings will decrease, so make sure they’re ready for it. Some annuities are adjusted for inflation, which can be a big help.
- Failing to have multiple sources of income. Some financial planners recommend having as many as four sources of retirement income. The reason? If one loses value, all is not lost. That what makes having a 401(k), as well as other IRAs or personal investments so important.
- Not being more conservative. Within 5 to 10 years of retiring, it’s time to start protecting savings by shifting assets to more conservative investments. More money should also then be placed in low-cost investments.