How to Blow It

Richard Quinn

THERE’S AN ABUNDANCE of advice on how to plan for retirement. Oh, it’s good advice. But it’s also a bit complicated, often requires discipline and always necessitates actually doing something.

And let’s face it: Who needs advice? Who wants to actually do something? Here are 20 ways to ignore the experts—and wreck your chances of a financially comfortable retirement:

1. Keep thinking retirement is so far in the future that there’s no need to act now. There’s still plenty of time. After all, you’re only [insert age].

2. Avoid saving when you’re young and instead play catchup starting at age 50. At that juncture, the government allows you to save more in both employer plans and IRAs, so that must mean it’s okay to wait.

3. Bank on being able to work until age 75 or beyond.

4. Live for today, so you accumulate debt right up until the day you hope to retire.

5. Invest in individual stocks you pick personally. Almost as good: If offered a retirement plan at work, close your eyes and pick the three options that sound best.

6. Ignore all the retirement planning tools available to you. They’re just too time consuming.

7. Never contribute to your 401(k), because right now there are so many better uses for the cash. Can’t resist the savings urge? Make sure you contribute at a level where you don’t earn the full employer match.

8. Keep the same mix of investments at age 60 that you had at age 25. Change is not good.

9. Take your Social Security at age 62, needed or not. It’s your money. Grab it while you can.

10. Only save in tax-deductible accounts and don’t bother with the Roth, let alone taxable accounts. That way, you can spend your retirement paying ordinary income tax on all your investment gains.

11. Ignore the need to provide for survivors. Don’t designate beneficiaries for your 401(k) or IRA. Don’t bother with life insurance. Got a pension? Talk your spouse into agreeing to a single life annuity benefit. After all, it’s your pension, right?

12. Make sure all your savings are in tax-favored plans, so they aren’t easily accessible in an emergency. What about the income taxes and potential tax penalties? You worry too much.

13. Assume there will be a major drop in your spending when you retire. Make a list of all your expenses, just to be sure. Are things looking a little tight? For goodness sake, don’t tell your spouse.

14. Cancel that long-term-care policy you bought years ago. If you haven’t needed it so far, you likely never will—and, besides, you have plans for that premium refund.

15. You’ve been waiting so long to buy that boat or RV. You deserve it. And what do you know? It’s so easy to get a 401(k) loan.

16. Invest heavily in your employer’s stock. There’s no doubt it’s a good company—and not at all like Enron.

17. Don’t worry about inflation after you retire. It’s been low for years and no doubt it’ll stay that way.

18. When someone tries to explain the power of compounding, don’t bother listening to all that gobbledygook.

19. When there’s a big drop in the stock market, make sure you shift into bonds. There’s no point sitting around and losing everything.

20. Still got money left for retirement? Tell your adult kids you’re always willing to help them out financially.

Richard Quinn blogs at Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include Don’t Call Me ThatHappily Ever After and The Office. Follow Dick on Twitter @QuinnsComments.

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