5 Most Common Retirement Planning Mistakes to Avoid

In this blog post, I’m sharing the 5 most common retirement planning mistakes to avoid if you want a secure financial future. Successful retirement planning doesn’t happen by accident. It requires intentional adherence to an end goal and a process to reach that goal. Half the battle is in avoiding the mistakes and pitfalls which can trip us up along the way.

Being aware of what these mistakes are is crucial to ensure that you save up all you can to build your nest egg and have enough money to last you into your golden years.

What are the five most common retirement planning mistakes to avoid?

1-Not having a plan
There’s an old quote, “A goal without a plan is just a wish.”
That’s 100% true here. You’ll want to create a solid plan to reach your retirement planning goals and follow it if you wish to be financially secure in your golden years. Start with taking a financial inventory. Then tackle your debt.

Do what you can to keep yourself motivated so you can build wealth for your future. Having a well thought out plan will enable you to avoid retirement planning mistakes I’ve seen so many women make.

2-Tolerating too much debt
Not taking ownership of a debt problem will only cause it to snowball and become more difficult to handle. Too often, women fear looking at their debts. It all just seems too overwhelming. So they mentally shelve it away into the dark recesses of their mind, thinking/wishing/fantasizing that the problem will go away on its own. But it won’t just magically disappear. In fact, it’ll become even more disastrous. The creditors will start calling and notices will become more frequent. How do I know? Because I struggled with six-figure credit card debt fifteen years ago. It was the most grueling experience I’ve ever gone through. You can read my messy money story here.

Ladies, trust me on this. You must address your debt and financial troubles as soon as possible. Make it your number one priority. Your future self with thank you a thousand times over.

3-Lifestyle creep
‘Lifestyle creep’ is a term used to describe a situation where you spend more because you’re earning more. For example, you may have been on a tight budget before when you were earning a salary of $3,000 a month. So you find a new job that pays you $4,500 a month. That’s fantastic. You now have $1,500 extra disposable income. However, instead of paying off your debt and saving more, you decide to sell your old car and buy a newer, fancier car. After all, you can afford it now. What happens next is that a sizeable chunk of your extra $1,500 a month is now going towards paying for the new car’s monthly installments. You’re back on a tight budget because you’ve taken on new financial obligations.

I’ve seen this very common scenario too often when working with women who come to me for money coaching. We’ve all done it. We get so caught up in keeping up with acquiring the latest and greatest and then we find ourselves with too much credit card debt and not enough savings.

Just because you earn more doesn’t mean that you have to spend more. What matters is not how much you earn, but how much you keep from what you earn. So, don’t let lifestyle creep catch you off guard. It will only adversely affect your retirement planning.

4-Not increasing your financial literacy
We’re not taught about the basics of personal finance—taxes, credit cards, budgeting, investing, etc.—in school. So we have to take it upon ourselves to provide our own financial education.

Unfortunately, most women won’t do this. But you are reading this blog because you’re a Money Queen who rules her financial destiny. Creating a habit of increasing your financial literacy will help you immensely with your retirement planning goals.

Where do you start? Here are plenty of Women and Retirement articles HERE. And, this article written by M. Cindy Hounsell, is a great read with excellent tips: Building Your Future Retirement Paycheck.

Reading about women and retirement will help you avoid financial mistakes.

5-Not building wealth
Even if you’re a salaried employee, you’ll want to look for ways to increase your net worth constantly. Start a side business so you can earn even more than your day job.

Like motivational guru, Jim Rohn, used to say, “Profits are better than wages.”

The fastest way to save more is to earn more.

The fastest way to retire comfortably is to earn more.

The fastest way to pay off debt is to earn more.

Financially savvy women do whatever they can to earn more. Imagine yourself being able to become debt-free, invest well, and retire in comfort. It’s totally within your reach. You have what it takes to make it happen. Create a plan, then take action.

Remember these 5 retirement planning mistakes and avoid them at all costs. Your future self will thank you.