Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Avoid Seven Common Errors in Retirement Plans

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Avoid Seven Common Errors in Retirement Plans

Article excerpt

When it comes to retirement planning, never before have so many things been so much in flux: the job market, the stock market, the entire world economy. At this point it's anybody's guess how Social Security and Medicare might change. Ditto for the U.S. tax code, which plays a role in countless retirement-related decisions. Why bother to plan at all?

The answer, according to Consumer Reports Money Adviser, is that this is one of those situations in life where there are things we can control and others we can't. And we might as well not mess up the former.

In that spirit, here are seven common mistakes most of us can avoid if we choose to.

* Not having a plan: Many of us reach middle age with little more than a vague notion of our plans for retirement. At a minimum, all of us ought to have at least a best-guess estimate of (a) how much money we'll need to retire and (b) how much we'll have to save and invest each year to get there. Also worth considering: (c) how we plan to use our time and energy in retirement.

* Not having alternative plans: These days one plan is no longer enough. You might plan to retire early, late or never, but your employer might have different ideas. So it makes sense to have at least a plan B and possibly a C, D and E. For example, what would happen if you had to retire before age 65, when Medicare eligibility begins? What if you find yourself supporting an adult child? What if you plan to sell your house but the real-estate market collapses?

* Not knowing what you've got: Part of any planning exercise should be a thorough inventory of investments. Besides retirement accounts, many of us have picked up an assortment of other assets over the years, including shares of an ex-employer's stock, a bit of leftover cash in a child's 529 college savings plan -- you name it. The result of sorting it all out could be a pleasant surprise. …

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