5 Common Retirement Savings Mistakes (and How to Avoid Them)

Jun 03 2021

While it might be fun to daydream about how we want to spend our retirement years, if those dreams never become part of a plan, it can be extremely difficult to make them come true.
avoid retirement mistakes

To help you plan for and work toward your retirement goals, here are five common retirement savings mistakes and how to avoid them.


  1. Procrastination

    People have a variety of reasons for not saving for retirement:
    • “It’s too far away.”
    • “I have too many bills.”
    • “I don’t make enough money.”

      Our chart shows how starting early can make a huge difference down the road as your money compounds (accumulates earnings and interest over time).

  2. Not taking advantage of company retirement plans

    Payroll deductions through company retirement plans can be a convenient way to save your money before you can spend it. 401(k) plans allow you to save money on a pre-tax basis, so you reduce your taxable income and save federal and state taxes on those contributions. Just remember that money is taxable when you withdraw it.

  3. Saving too little

    If you don’t save enough by the time you want to retire, you may have to put off retirement or reduce your standard of living in retirement.

    The average person who retires at 65 or 66 years old typically lives another 20-plus years, so your money may have to last awhile. Social Security usually only makes up about 35-38 percent of the average retiree’s income.

    We recommend meeting with a trusted financial advisor to help you figure out how much money you might need in retirement. And try to put 10-15 percent of your income – between what you and your employer contribute – into a retirement savings plan.

  4. Not investing properly

    Some people get nervous about normal market fluctuations, so they may avoid the stock market – but that’s where higher returns typically come from. Over the long term, it tends to average out, and good years make up for the bad ones.

    It’s also prudent to gradually shift to a more conservative investment approach the closer you get to the time you’ll need that money to live on. (You don’t need all of your money to live on right away when you retire, so some of it can likely remain in more aggressive investments for a bit longer.)

    Target-date retirement funds are a popular way to manage your money based on when you plan to retire. A trusted financial advisor can also help you with appropriate market allocations. The most important strategy is to base your investing on the long-term and make sure not to let your emotions interfere with your plan.

  5. Neglecting to set a retirement goal

    Your retirement goal should include planning when you want to retire, where you want to retire, what you want to do in retirement and whether you want to maintain your standard of living.

    To maintain your standard of living, we recommend saving approximately:

    • 1 times your salary by age 30
    • 2 times your salary by age 35
    • 4 times your salary by age 45
    • 6-7 times your salary by age 55
    • 8 times your salary by age 60
    • 10 times your salary by the time you can collect full Social Security benefits (age 67 for most people)

Thinking about retirement can be stressful. We can help. At Bell, we get to know you – your finances, family responsibilities and goals – then work with you to create a plan that gives you peace of mind.


Jeff Melchior

Jeff Melchior, CFP®
VP/Relationship Manager
Fargo Downtown
Main: 701-298-2240


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