4 Ways to Destroy Your Retirementhttp://www.fool.com/retirement/general/2009/04/21/4-ways-to-destroy-your-retirement.aspx Claire Stephanic
April 21, 2009
In 2008, the stock market had its worst year since 1931.Given that returns have remained brutal in '09, and with constant chatter about "the second Great Depression," it should surprise no one that many Americans are worried about retirement.
As it turns out, they should be. According to the 18th annual Retirement Confidence Survey, conducted in April 2008 (before this mess really got going), less than half of workers have attempted to calculate how much money they will need for a comfortable retirement. That means that more than half of the working population hasn't even attempted to run the numbers! Worse yet, the survey also reports that 46% of workers have a total savings of less than $50,000. And 22% say they have no savings at all.
In addition to insufficient savings, future retirees will have to deal with rising health-care costs, unreliable Social Security benefits, and underfunded (or nonexistent) pension plans. In the face of these perils, Robert Brokamp, advisor of the Fool's Rule Your Retirement newsletter, warns against four common mistakes that can lead to a disastrous retirement:
1. Plan too late
Robert suggests calculating how much you will need in retirement according to inflation, your lifestyle, and any retiree benefits you expect to receive. Then calculate exactly how much you need to sock away per month to meet your goal.
2. Don't save enough
Clearly, saving is not a priority for Americans. But if you would like to retire, ensure the discipline to save by having your monthly contribution automatically deducted from your paycheck. It's less painful to part with, and you'll never skip a month.
3. Invest unwisely
For example, Robert's "Fool's Rules for Asset Allocation" shows suggested allocation for a conservative, moderate, and aggressive investor: