ORLANDO, Fla. – A survey from Bank of America and Merrill Lynch found that 81 percent of Americans do not know how much they will need for retirement. But even if you consider yourself someone who has it all planned out, there are three major mistakes that could mess up even the best retirement plan.
An article from time.com lists three big retirement mistakes.
1. Underestimating how long you will live.
“With today people living into their 80s 90s and even beyond 100, you want to make sure you don’t run out of money,” said Celine J. Pastore, CRPC, RFC from SimplePath Retirement, LLC.
A financial engines survey found that three-fourths of people did not know a 65-year-old man is expected to live another 20 years.
You do it: Calculate your life expectancy.
2. Failing to estimate how much you will need to save.
Nearly half of workers 55 and older have not calculated how much they will need for retirement. It is important to realize you will probably be spending less money during retirement and may need to make adjustments. Try making those cuts now to see if you can do it.
3. Not realizing that you can increase your income by postponing Social Security.
Two-thirds of people polled did not know they could collect an extra 6 to 8 percent for each year they delayed collecting their benefits, between ages 62 and 70. Check out Social Security’s Retirement Estimator to see the monthly benefits you could receive at various ages.
Retirement-plan provider Fidelity Investments says by age 30 you should have the equivalent of your salary saved. By age 50, have six times your salary saved, and if you want to retire by age 67, have ten times your salary saved.