7 Things That Can Derail Your Retirement Investing

Any American saving and investing for retirement is on the right track in principle by preparing for the future. But just because a retirement investment plan starts off in the right direction doesn’t mean it will end up at the intended destination. There are a number of mistakes, oversights and changes in circumstance that can completely derail even the best retirement plan. Instead of simply hoping for the best, it’s a good idea for retirement investors to consider each of these seven potential problems and do everything they can to avoid or prepare for each.

  1. Being Too Safe

It can be scary and difficult to invest hard-earned money in volatile assets that could easily lose value. Cautious investors often see stocks as particularly risky. After all, the Standard and Poors 500 index lost nearly half its value within a year’s time as recently as 2008. It may seem appealing to invest entirely in low-risk investments such as certificates of deposit or long-term treasury bonds, but being too risk-averse can make retirement goals even more difficult to reach. Rely on diversification and patience to limit risk, and don’t shy away from the high-return stock market too much.

  1. Not Having A Well-Defined Plan

The stock market has demonstrated historically low volatility in 2017. When financial markets are calm, it may seem like there’s no reason to stress over retirement investing. Most stocks, exchange traded funds, mutual funds and other investments have been on the rise since 2009, and most retirement portfolios have been too. But inconsistent, ill-prepared investing plans typically result in inconsistent investing results. Investors should never adopt a “just wing it” attitude when it comes to retirement. If the economy takes a downturn in the future, retirement investors don’t want to be scrambling to make critical investing decisions in real-time.

  1. Thinking Too Short-Term

Perhaps the only thing worse than being too conservative with retirement investing is being too aggressive. There’s no shortage of analysts and expert commentators online and on financial news shows making stock picks of the week. For the average retirement investor, this type of short-term thinking is practically useless. Younger investors need investments that will perform for decades, not weeks. Older investors shouldn’t be making short-term bets with retirement just around the corner. Buying and selling stocks in an attempt to time the short-term swings in the market can be extremely difficult, even for professional traders.

  1. Ignoring Time Horizon

Time can be…

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