As you approach retirement, you have less time to recover from investment mistakes. Thus, it becomes even more important to avoid common errors. Mistake #1 is paying too much in fees. For someone with hundreds of thousands of dollars invested, fees can easily exceed thousands of dollars a year. A second mistake is taking unneeded risks. As you near retirement, it’s necessary to reduce risk on your portfolio. A final pitfall is taking out too much money too fast. A recommended withdrawal rate during retirement is 2-3%. If you exceed that amount, you may eventually run out of money.
- Be diligent about what kind of fees you are paying because they can add up.
- Bonds are perceived as safe, but high interest rates can put them at risk.
- As you reach retirement age, you need to formulate a comprehensive plan to prevent you from outliving your money.
“Balance is key — and that means looking into other asset classes, such as real estate, commodities, annuities, futures, etc.”