Investments & Loans

Retirement planning is crucial. The wrong move can be very hard to correct when it comes to retirement. So, what are the top 5 mistakes people make in retirement?

1. Withdrawing money too soon
By withdrawing your money too early you can get hit with an early withdrawal penalty. Generally, 10% if you withdraw before age 59 and a 1/2. There are rules that allow you to withdraw from age 55. But, you need to follow the guidelines carefully.

2. Withdrawing money outside the tax sheltered environment
If you withdraw your money outside the tax shelters of your company plan or a tax deferred haven like your IRA, you will have to pay state and federal taxes.

3. Taking a check
If you role your savings into an IRA, make sure you get the money sent direct. If your company plan cuts you a check you will have to pay state and federal taxes.

4. Not seeking professional advice
All these pitfalls are easily avoided by interviewing and hiring a trusted, professional financial adviser. (And if they mess up.. you have the legal system to fall back on..)

5. Company Stock
If handled correctly you can just pay tax on the purchase value of your company stock. Not the market value as it stands today. But again, you have to carefully follow the guidelines. The difference between purchase price and market price can be substantial over a 30+ year career.

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