View TranscriptI'm Carrie Hodge, a senior vice president with SouthState Investment Services. I'm also a certified financial planner. Today, we're going to talk about common retirement investment mistakes. Having enough money after you retire is a big concern for today's Americans. In fact, only roughly one in four feels very confident that they will have enough money to live comfortably when they retire, according to a recent financial survey.
The concern is certainly justified after all, Americans are living longer lives than ever before. And the uncertainty of being able to maintain a lifestyle for 20, 30 or 40 years after you retire is understandable. While there's no single action that can increase your confidence if you're nearing retirement age, there are several key investment mistakes that, if you avoid them, can help you maximize your retirement.
Savings and perhaps give you the confidence to help you retire with less financial stress. These are the things you'll want to avoid. Number one, failing to maximize your retirement contribution if you can afford to do so. Contributing the maximum amount to your employer sponsored retirement plan will increase the chance that you'll reach your investment goal. The earlier you start, the better it will allow your investments and any potential earnings to grow on a tax deferred basis.
Mistake number two, failing to develop a plan without a plan. It's difficult to understand whether your savings will help support your standard of living as such. Establish a plan early, laying out clear goals and incorporate the number of years until your planned retirement. This will help you create a practical investment plan for your goal. Without such a plan, it will be difficult to understand whether your savings will provide you with the living standard to which you've grown accustomed.
Mistake number three. Adopting a short term investment mindset, the stock market fluctuates a lot, and in the short term there's a decent chance of price volatility. Therefore, selling off your holdings whenever the market drops is a sure way to incur losses that impact your long term goals. Mistake number four. Trying to be perfect. Timing your investment decisions based on when the market will be at its highest or lowest is a risky business, and it can lead to missed opportunities.
Invest your money with an eye towards the long term, which can provide for more long term stability. State number five Putting all your financial eggs in one basket. Some investors make the mistake of investing in just one fund or asset type. This is risky business at the market swings and impacts that one holding. On the other hand, if you diversify your risk over a mix of assets.
This can help control any potential losses during short market swings. By avoiding these common mistakes, you increase the potential for investment success and reaching your retirement savings goal.