Special Report

14 Mistakes That Can Wreck Your Retirement Plans

Source: Thinkstock

13) Too much spending, even if you are rich.

If some lottery winners go broke after winning millions of dollars overnight, imagine what would happen to the rest of us if we thought we had to have the best of everything. Big houses, luxury cars, fancy jewelry and watches, high fashion and trendy clothes can all distract disciplined savers. Now consider the insurance you may have to have for those things, as well as your other daily living costs. Being sensible on your lifetime choices for expenses will give you enough free cash to invest for your retirement.

Source: Thinkstock

14) Getting caught up in hype of today, pain of tomorrow.

Most people do not work directly in the financial markets, so it is important to avoid thinking bull markets never end as well as believing that bear markets and recessions are the end of the world. The current bull market that has been going since March 2009 will not last forever. The Great Recession also came to an end without the stock market going to zero. Do not chase your tail based only on the themes or trends of a given day, week month or year. Warren Buffett may have put it best about chasing gains or panicking out of the markets: “Be greedy when others are fearful, and be fearful when others are greedy.” Maybe the greatest investor of the modern era knows a thing or two.

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