1. Don't be afraid to seek help
If throughout the years, you realize that your retirement planning becomes complicated, be sure to get help. Being prideful and trying to do things alone may cause you to make irrational decisions. A certified financial planner can help with your individual retirement plan. Larry Luxenberg, managing partner and chief investment officer of Lexington Avenue Capital Management says, "someone not doing this full time will be less likely to spot trouble. When an amateur gets these wrong. It could spell the difference between a comfortable retirement and a much delayed one—or worse.” So swallow your pride when it comes to building a long-term portfolio, and get help if you know deep inside that you need it.
2. Don't get jealous over what others have
Envy drives people to compete with others. “Driving new cars, acquiring a home in a fashionable neighborhood, and sending the kids to private school to keep up with their friends are surefire ways to minimize your retirement saving potential,” says Mark Petersen, CPA, CFP, and vice president of affluent wealth planning for Carson Wealth. When you try to compete with others financially you are likely to make risky bets and stock picking could lead to a financial disaster. Instead, opt to invest in broad categories of asset classes to minimize your risk.
3. Don't let anger cloud your judgment
Anger should not cloud your judgment when leaving a job. Irrational decisions tend to be made in the heat of anger. For instance, leaving a job without sufficient planning could wreck retirement savings. “You may be living off that savings if your job search takes longer than expected, and voluntarily leaving employment may disqualify you for receiving unemployment benefits,” says Petersen.
4. Don't get greedy and chase returns
Investors tend to get greedy and chase returns. But this is often done to their detriment. Luxenberg says “Once a stock or new investment vehicle starts moving, it’s tempting to jump on board. Your friends and family are all making great money at it. Why not you?” However, most people tend to wait until the trend is well-established before they plunge in. “Most investors buy the right things but do it at the wrong time, and that’s enough to sink a portfolio,” he says.
5. Don't get lazy
Sloth is a means of laziness and laziness is not a good trait in investing. According to Luxenberg, “Most investors don’t spend enough time on their retirement planning and don’t review their options sufficiently enough. You have to do your homework, know your options, and determine which are best. When to draw from retirement accounts, how to invest, what investment vehicles to use—all have tax implications, for example.” So, when you have a plan in place, it's important to stay on top of your investments through your retirement years.
6. Don't get overly greedy when making money
Being overly greedy in the market tends to lead to investment failures instead of successes. Rather, it is better to be goal-oriented. In fact, chief investment officer of Warren Financial Randy Warren says “People who have goals often strive to reach them. Just wanting to make more money is not really a goal. That’s gluttony. If you are goal-oriented, it will affect your investing strategy. So you may not need to shoot for the moon in terms of investment returns.”
7. Don't lust after what you cannot have
Keep your retirement planning goals realistic. It is essential that you do not lust after what you can't have or cannot achieve because you might end up by putting too much at risk in the effort of trying to get it. For instance, if you currently have $1 million in your account and tell your financial planner you want $5 million in three years so you can retire, that would mean that you are lusting after an unrealistic objective. As Warren says “Investing is not wishing for something you don’t have."
