7 Deadly Sins of Retirement Financial Planning

This is an article I wrote back in 2008 which, till this day, is still very applicable. Enjoy.

7 Deadly Sins of Retirement Financial Planning

…and Virtues That Cultivate a Gainful Financial Game Plan

Retirement-based financial planning takes far more than faith…it takes action. And, investing one’s valuable retirement dollars “on a wing and a prayer “ can wreak havoc on even of most well-intentioned plan. Knowing what pitfalls to avoid can make all the difference in securing a heavenly lifestyle for your golden years.

With this in mind, the following are 7 Deadly Sins to avoid at all costs when planning for your financial future, along with enlightening common sense tips to help would-be wealth seekers get on their way to the financial promise land:

1. Pride. Ditch the “I can do it on my own” mentality. Rather, seek out a retirement-specific financial planning expert who can help ensure your hard-earned savings have the greatest potential for growth. Although professional fees will be incurred, the old adage of “pennywise and pound foolish” could not hold more true.

2. Envy. Comparing how much you have built up for retirement to others can either cause you to get discouraged and give up on your efforts, or get overly complacent and slack on your planning. It’s far more important to develop – and stick to – a sound game plan structured to attain your distinct retirement lifestyle goals.

3. Anger. Harboring anger at the government for the impending insolvency of Social Security, or the mounting threat to corporate pensions and retirement benefits will not secure your retirement and is, therefore, wasted energy. Instead, take charge, assess where you are in terms of your current assets and liabilities and how they are tracking toward retirement. Resolve yourself to do everything required to generate retirement asset ROI to better ensure your senior lifestyle goal.

4. Greed. While gambling is fun in Vegas – even with a few losses along the way – the same does not hold true with your retirement savings. Taking unnecessary risks, chasing a ‘hot’ stock tip or mutual fund, or buying ‘junk’ bonds or any number of other speculative ventures is a certain way to lose what you have worked so hard for – and need to sustain you through your golden years. With retirement planning, it’s imperative to reduce risks to the fullest extent possible, ideally with principle guarantees, using proven investment strategies in order to attain your financial goals.

5. Sloth. Going the lazy route and resigning yourself to being dependent on others during your senior years need not be your fate. The truth is, no matter what your age or how much, or how little, you have in the way of assets, it is NEVER too late to start saving and planning for retirement – but it does take a bit of motivation. While late planning may take a higher level of drive and creative strategy, you will certainly be in better financial shape, feel better about yourself, and enjoy retirement a lot more than if you did nothing at all.

6. Gluttony. Spending every penny you make and then digging an even deeper grave through acquiring excessive debt is a recipe for disaster. Recent problems with leading U.S. corporate pension programs have underscored the extent to which one cannot depend on so-called safety nets. It’s imperative to set up a plan that first serves to eradicate debt and get sound retirement planning fundamentals in place. Once the plan is in place, be sure to infuse it with additional funds on a regular basis – at least once a month is advisable.

7. Lust. We live in a culture where instant gratification is not only revered but, all too often, is expected. Over indulgence can rob you of valuable resources needed to secure your future, so don’t have a short-term outlook on life. What will work is strategizing a financial game plan with a qualified professional, implementing that plan, and staying the course no matter what temptations may present along the way.

Ensuring a comfortable retirement in today’s volatile investment climate is daunting, but it is also achievable with the knowledge of what to do and, as important, not to do. Even when using a financial advisor, it’s imperative for seniors and others saving for retirement to avoid complacency and be actively involved in their financial planning to ensure their unique and personal needs are being catered to.

At the end of the day, a cookie cutter financial plan is the deadliest of all sins, as no two individuals will have identical needs, goals, and resources. If nothing else, heeding my retirement planning ‘7 deadly sins’ warnings will help individuals preserve hard-earned assets and maximize the retirement income stream they want and need.