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You’ve been warned about the dangers of not saving enough for retirement. But, without proper planning, you could actually end up saving too much.

When you’re navigating the choppy retirement waters, here are six other mistakes to avoid.

1) Break a Leg? Don’t Invest Too Much in Stocks

The model used by the majority of money managers consists of stocks, bonds and mutual funds—and that’s a mistake, according to Jason Vanclef, author of the “The Wealth Code: How The Rich Stay Rich in Good Times And Bad.”

“If you look at the wealthiest people in the world, that’s not where their investments are, they [are] investing in tangible ideas—things that will generate cash flow.” 

Vanclef suggests spreading wealth out into different areas including bullion notes, real estate and oil.

“The financial security table has many legs, Wall Street pushes stocks, bonds and mutual funds, because that’s what makes them money, but if that leg breaks, like it did recently, you want to make sure you have other legs under your table.”

2) Don’t Invest Too Little in Stocks

People are dumping a lot of money into 401(k) plans, but are only capturing a fraction of the market’s return,” said Daniel Solin, senior vice-president of Index Funds Advisors and the author of “The Smartest Investment Book You'll Ever Read.”

He said people should have a globally-diversified portfolio and invest in low-cost index funds.

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3) Don’t Shoot Yourself in the Financial Foot 

“It might seem strange, but the less liquidity a person has the less of a chance they have of shooting themselves in the foot,” said financial planner Vanclef.

He advised to keep 30-35% of your money liquid, and tie the rest up in profitable investments. 

4) Don’t Lock it All up in Tax-Deferred Accounts

Relying solely on tax-deferred accounts like IRAs and 40(k)s is not a good idea, said Certified Financial Planner Lisa Brinig of CBIZ Wealth Management in San Diego, Calif.

“You should put some of your money in a taxable account that has no strings attached.”

All too often, she said clients are shocked at the amount of taxes they end up dishing out when they start withdrawing money from tax-deferred funds to cover expenses. Taxable accounts will also help you stick to your budget if you retire earlier than expected.

5) Don’t Retire too Early

If possible, Solin suggests working two to three years longer.

“Just a couple of years significantly increases your nest egg—it’s less time you’re eroding money and your money is compounding during that time and you still have health insurance,” he said.

People also tend to not realize how long they should be planning for, said retirement expert Jeri Sedlar.

“People underestimate their longevity and under plan,” she said. 

6) Don’t Forget About Inflation

When planning your retirement, be sure to factor in 3% inflation each year, said Brinig.


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