3 Retirement Planning Traps That Can Derail Your Dreams

It's hard to plan for retirement. One reason is that unanticipated problems can disrupt your retirement planning and make it almost impossible to recover financially.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through three of these retirement planning traps. First, Dan notes that many people fail to take into account the financial needs of other family members, including parents, children, and grandchildren. Second, many retirees think they'll be able to downsize from their family homes and unlock home equity, but Dan points out how that strategy failed during the housing bust. Finally, Dan warns about assuming that one working spouse can support an older retired spouse, given the risk of a layoff or a disability that can quickly wreck a financial plan. Dan concludes that you need to include contingencies in your retirement planning to avoid these potential traps before you can fall into them.

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Have general questions about Social Security? Email them to, and they might be the subject of a future video!

Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 28, 2014, at 10:23 AM, bxy wrote:

    This social security advertisement is on virtually every aeticle. What gives?

  • Report this Comment On April 29, 2014, at 7:18 AM, KellyW91 wrote:

    The most common and critically important goal shared by our clients is maintaining their

    financial independence in retirement. One tax misstep, and clients and family legacies can be

    hurt for generations to come.

  • Report this Comment On April 30, 2014, at 8:00 AM, BrettMoore38 wrote:

    I am really nearing an age when I can't afford to make mistakes with my retirement savings. I don't think that I have put away enough money, and after sitting down with a financial advisor last fall I am pretty convinced that he just wanted to sell me expensive annuities that won't help me much.

    I decided to follow my own plan (after educating myself and deciding what will work for me) and I save money weekly to a Roth IRA. I invest in low cost Vanguard mutual funds, with a 70/30 mix equities to bonds.

    I have a wife and two beautiful kids, and I want them safe if something happens to me. I regret to say that previously said advisor sold me a whole life insurance policy about 4 years ago that I have been paying $330 a month for. After some research, and watching shows like Suzey Orman I decided that I would be better off cashing it in (what a waste) for some Term. I got the same coverage from a policy at LifeAnt for $27 a month, and I save the difference to my 401k at work (and get a 4% match.) If you haven't heard of buying term and saving the difference watch Dave Ramsey sometime its pretty crazy.

    All I know is that I want the freedom to work a lot less when I get to my golden years and I do not want to rely on Social Security or be a burden to my kids. Luckily I think that I still have enough time to make a push.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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