6 Problems that Can Crush Your Retirement Plan Goals

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[Click here to watch the demo.]( [CLICK HERE...]( Fellow Investor, [Bob Carlson]It’s the story I hate to hear from my readers… and given today's turbulent economic conditions, I'm hearing it more and more often... People who planned well for retirement but saw their hard work and planning fall apart during retirement. These stories are all too common. Yet the causes of most of these retirement failures are well-known. Avoid these 6 problems and recurring mishaps, and your retirement is likely to be successful. 1. Helping too much. Too often, people dip into their retirement funds to give too much money to loved ones. Unfortunately, that often turns out to be money they need later in retirement. This also is known as “becoming the Bank of Mom & Dad.” Many parents don’t like to turn down requests for help or see their children deprived. Some are too proud to tell their children they can’t afford to help. Most grandparents, of course, like to spoil their grandchildren. Though children and grandchildren are the most common beneficiaries of help, pleas for help sometimes come from others. Some people avoid this problem by having financial advisors explain the facts to those requesting help. Others simply point out that if they provide help now, in a few years they’ll be turning to the recipients to help them get through the rest of retirement. Your retirement spending plan can include gifts to loved ones. But you have to know the limits of what you can afford to give and adhere to those limits. 2. Taking on second homes. A second home in retirement is nice and part of the stereotypical retirement. But many people plunge into second homes without fully understanding the costs. The home devours a significant part of retirement nest eggs. A big chunk of your retirement capital can be tied up in a second home. Also, owning and maintaining homes involves both predictable, fixed expenses and a number of surprises along the way. Your spending plan has to anticipate all these expenses. Especially critical are the maintenance costs that increase a few years into ownership. The usual response from people is that they’ll rent or sell the home if it becomes a burden. Unfortunately, in most markets, a home can’t always be sold or rented at the desired price when you need to do it. Be sure you’ve considered all the potential costs, especially over the long term, of the second home, and if they fit comfortably in your spending plan. 3. Taking on debt. It used to be routine to be debt-free in retirement. More recently, many financial advisers have urged people to maintain debt in retirement, especially at the recent low interest rates. It’s also common for people to take on debt in retirement to pay for unexpected medical expenses. Debt reduces your financial flexibility. Your basic fixed expenses, including debt payments, shouldn’t exceed your fixed, guaranteed income. You also need the flexibility in your spending plan to add some unplanned major expenditures, such as medical expenses and home repairs. Having broad insurance coverage to cover most unplanned medical expenses is a better strategy than assuming you’ll borrow to pay such expenses. Insurance often puts a ceiling on your out-of-pocket costs and makes planning more predictable. [Do You Hold an IRA, Roth IRA, 401(k) or Pension?]( Brace yourself... because your retirement money is now at serious risk. It all has to do with a new law on the books that's designed to eat away at Americans' retirement funds – quietly and efficiently. To learn what's at stake, [click here]( for retirement expert Bob Carlson's new video – along with his #1 strategy for keeping your nest egg where it belongs... with YOU. [CLICK HERE...]( 4. New businesses. A significant percentage of retirees leave successful careers but want to continue working and producing. Often, they start new businesses. That’s fine for people who started businesses in the past and know the angles. But the skills for success in other fields often don’t transfer to being a successful entrepreneur. Be aware of the high failure rate for new businesses, and cordon off most of your retirement assets from the business. Only capital you don’t need to maintain your standard of living should be at risk in the business. 5. Not anticipating the solo years. Many retirement plans are successful as long as both spouses are retired together. But when one spouse passes away, finances can unravel. One Social Security check stops, and other income also might terminate or be reduced. Also, non-monetary contributions from the other spouse often are missed. People might have to be paid to do chores around the house the deceased spouse used to do. Your plan needs to assume that, at some point, one spouse will be living alone and should provide a way to maintain the surviving spouse’s security. A quiet change in recent years is that more retirees are living alone because of divorces late in life. When spouses split up in retirement, often both suffer financially by stretching the nest egg among two households. 6. Not having a spending plan. A major gap in retirement planning is the spending plan. Many retirees lack a clear plan for spending money. Solution: determine the maximum amount you can spend each year to avoid running out of money in the later years. Many people greatly overstate the amount they safely can spend in retirement without endangering their financial security. Others rely on rules of thumb that don’t apply to them. They spend too much in the early years of retirement, forcing them to struggle later. Aim for a customized spending plan that suits your planned lifestyle, estimated investment returns and other factors. To a better retirement, [Bob Carlson] Bob Carlson Editor, Retirement Watch Weekly Editor’s Note: We just discussed 6 common problems that often have negative effects on current and near-retirees... but a much more damaging one is looming. In short, the new administration is gunning for your IRA, your 401(k), and your Social Security, and there may be no stopping them. [Click here to find out what you can still do preserve your retirement nest egg.]( SPONSORED [How To Use Technical Indicators (The Right Way)]( Predictive analysis is revolutionizing the trading space as we know it. With high-accuracy forecasting, traders can dodge losses and squeeze the most out of gains. Our experts want to empower you with the knowledge and education to trade intelligently. Check out today's deep dive into cutting-edge, predictive technical indicators to see the tricks and tips you may not know about. [Click here to register for free.]( [CLICK HERE...]( Want More Retirement Advice? Check out my website, [RetirementWatch.com](, where you’ll find hundreds of free articles covering every aspect of retirement planning. Popular Posts: [The Overlooked Retirement Time Bomb]( [Understanding Rules of IRA Contributions]( [Strategies to Reduce Alternate Minimum Tax]( [Avoiding Expensive IRA Mistakes]( About Bob Carlson: [Bob Carlson]Robert C. Carlson is the author of the books The New Rules of Retirement and Retirement Tax Guide, editor and investment director of the popular retirement newsletter, Retirement Watch, and editor of the free weekly e-letter, Retirement Watch Weekly. Bob is a frequent speaker at investment conferences around the country, and you can also hear Bob as a featured guest on nationally-syndicated radio shows, such as The Retirement Hour, Dateline Washington, Family News in Focus, The Michael Reagan Show, Money Matters and The Stock Doctor. 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