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February 6th, 2008
You heard commercials about people who are willing to help you with your retirement planning. However, it is your money and your future so you need to be the one in control. In the end only you will know how you want to retire. Some people take retirement planning into their own hands, and that is quite alright. When you are planning for a retirement, you need to watch out for these mistakes.
Passing On Employer Matching Programs
If you want to start a retirement fund then you should ask within your employer. A lot of employers can offer you a plan that will help you by matching your personal contributions that do not exceed a certain amount. If you sign up for this you must know the amount that they will match. If they will match four percent of the salary you contribute. The reason you need to know this number is because if you contribute less then that four percent you are wasting your money.
Forgetting About Fees and Charges
Anytime you have to pay large fees then you hurt your return on your retirement account. In some cases you may be subject to thousands of dollars a year. If you have to pay tens of thousands of dollars over the life of your retirement plan then you are wasting a lot of money. That is why you need to look at all the fees and charges you may be subject to. If your plan is going to be fee heavy then step away from him. You could even approach your employer and ask them to change the way they go about retirement plans.
Assuming You Cannot Touch Your Principal in Retirement
When people reach retirement they often plan to withdraw about 5 percent each year from their account. They will generally assume that this percent will come from the interest they have built up as well as the dividends. Over time however, an account that is well run should return around 8 percent. This is why you always need to assess your current standing.
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