- Not creating a realistic assessment of financial resources. Half of all older workers haven't calculated what they need for retirement or budgeted for retirement expenses.
- Retiring too early with insufficient financial resources. This is a natural consequence of not preparing a financial needs analysis. And an increasing reliance on 401(k)/account-based plans presents a significant challenge. The average 401(k) account balances of older Americans are far from sufficient to fund an adequate lifetime income.
- Starting pension benefits too early. Most workers retire before maximizing their retirement income (usually the "Normal Retirement Date").
- Starting Social Security benefits too early. Half of all Americans start taking benefits at age 62, the earliest possible age with the lowest amount of monthly income.
- Drawing down 401(k)/retirement savings too rapidly. Withdrawing just 4% to 5% per year is considered a safe withdrawal percentage, but many people withdraw at much higher rates.
- Uninformed or poor selection of financial advisors and/or products.
- Tapping home equity too early through home equity loans or reverse mortgages.
- Continuing an unhealthy lifestyle. Doing so increases your chances of developing expensive, debilitating conditions.
- Not having strategies in place for medical and long-term care expenses.
- Having living expenditures that are unnecessary, unrealistic or unaffordable, given all of the above mistakes.
And here is one more, thrown in for good measure:
Not having a good idea of what you want to do in your retirement years!