6 Retirement Planning Mistakes

One of the most daunting things we must think about in our lives is how financially comfortable we will live in our golden years. It's no secret that it's getting harder for most people to save enough to live the same way in retirement as we do in our working years. That's why you cannot afford to make mistakes in your financial planning.

Here are some of the most common mistakes people make. Some mistakes are tough for even possible to overcome, so it's a good idea to avoid these if you haven't made them already:

1. Waiting too long to start investing. As the saying goes, don't put off until tomorrow what you can do today. If you are young and just entering the workforce, start your retirement savings as soon as possible.

The main reason for this is the power of compound interest. For instance, if your nest egg compounded at the rate of doubling every 6 years on average, missing out on just one doubling can be a six or even seven figure mistake. Even if you start out with modest savings, just start.

2. Not having clear retirement goals. Just throwing money into an investment account without much more thought isn't the wisest decision. Ask yourself some important questions, like what age you want to retire, how much will you feel comfortable living on, etc. As they say, if you fail to plan, you plan to fail.

3. Investing too aggressively. Your investing style is comes down to two basic criteria: your age and your tolerance for volatility and risk. But even those criteria aren't absolutes. For instance, even if you are an outright gambler, it's not wise to put all of your money in exotic and high-risk investments. If you are young, risk and volatility is easier to take, but you still want to have room for a diversified portfolio.

4. Investing too conservatively. There's nothing wrong with being cautious, but if it's so much so, you could be leaving money on the table. Again, everyone has their own tolerance and special factors, but don't be overly cautious.

5. Not taking care of your health. While the obesity epidemic has gotten plenty of publicity, its effects go beyond your physical health. When you are unhealthy there are expenses that come with it. Pay attention to what you eat and get moderate exercise and you should live a healthier and happier life in more ways than one.

6. Retiring too early. If you take heed of the aforementioned advice and take care of your body, it's likely that will live longer. While every person's situation is different, seriously consider whether or not should be retiring at the age you are thinking. If you can afford it, great! But there is no greater fear than outliving your retirement funds.

Another consideration is taking your Social Security benefits a little later. Many people elect to receive their Social Security benefits at 62. Doing so means you will receive substantially lower money. Waiting just a few short years to make a real difference.