Preparing for retirement is not usually an exciting or fun topic and often the rewards are far enough off that it's difficult to really engage. And, even worse, short-term benefits can lead to long-term difficulties that could be easily avoided with a little planning. It's critical to have a good retirement plan and process for updating it and improving it as time goes on. Running out of money in old age is a terrible experience.

1. 5 Common Financial Mistakes Guaranteed to Ruin Your Retirement
Preparing for retirement is not usually an exciting or fun topic and often the rewards are far
enough off that it's difficult to really engage. And, even worse, short-term benefits can lead to
long-term difficulties that could be easily avoided with a little planning. It's critical to have a
good retirement plan and process for updating it and improving it as time goes on. Running out
of money in old age is a terrible experience.
Unfortunately, in addition to that, there are some very easy mistakes that are often made that can
make a huge negative impact on your retirement. Here are five:
Buying on Credit:
Credit is one of the wonders of the modern age. It allows for home and vehicle ownership by
many more than could possibly manage if they had to pay in cash. It powers industries and
businesses and is definitely a good thing. However, consumer credit can be a tricky beast. It's
tempting to buy just a little more than you need and put it on the card. It's easy to buy a car that
costs just a little more and pay it off over time. The more you have on credit, the more you're
paying on your debt, the less you're putting aside for retirement. Worse, if retirement comes
earlier than you expect, you'll still have that debt to pay back on a restricted income.
Ignoring Your Credit Score:
While avoiding buying too much on credit is important, it doesn't mean you can ignore your
credit score. You may well need to put something on credit. Whether an emergency expense on a
credit card, or an early replacement of a vehicle that has broken down unexpectedly, having the
credit available, at a reasonable rate of interest is important. It can save your bacon in many
circumstances. A poor credit score, though, means many of those options are either unavailable
to you or are so expensive that taking advantage of them would be foolish. Manage your credit
score to keep your options open.

2. Using Standard Savings Accounts:
Many people simply put retirement savings into a standard savings account and let it go. This is a
great way to be beat out by inflation. If you have a certain sum of money, in 10 years it will be
worth significantly less than it is today. That's just how inflation goes. So sticking your money in
a standard savings account, or under the mattress, just means that money will be available but
worth much less than when you set it aside. Also, it's very easy to pull money out of those
accounts and that temptation can be overwhelming. Putting retirement savings in a tax-protected
account provides some tax benefits and puts up barriers to early withdrawal.
Living Beyond Your Means:
The less you spend on a new car, new house, and gadgets and toys, the more you can put towards
retirement. Don't starve yourself, but realize that it's all a trade-off. More toys now, or being
comfortable in retirement.
Being Too Risk Averse:
Investment is required these days for successful retirement. If you have the time, if you're a
younger person, don't be totally risk averse, you have time to work the market and take
advantage of the ups and downs.
Edward Schinik has been with the Investment Manager since 2009 and has been with one
Affiliated Investment Manager since 2005.