Financial decisions are a lot easier with the benefit of hindsight. Here are some common mistakes people have made this year and how hindsight could have helped them in 2020.
The Reality of the Matter:
Have you ever looked back on a financial decision and thought, “I wish I would have done that differently”? Decisions about money are a lot easier with the benefit of hindsight. On this episode of the Retirement Reality Podcast, Mike Kojonen looks at five common money mistakes people have made this year.
Getting out of the market
When the market went down earlier this year, some people got scared and took their money out. When the market rebounded, they kicked themselves for selling.
“We’ve seen a few of these people who have come in our office,” said Mike. “It’s so important to work with a professional, because you can’t make emotional decisions like that.”
Not knowing your risk factor
Do you know the risk factor for how your money is invested? Some people think they have moderate portfolio investments, but it’s actually more aggressive than they think.
“You’re still in the market. Things aren’t guaranteed,” said Mike.
Meet with a financial advisor to look at your risk tolerance and do a risk assessment
Not knowing your social security options
People still don’t know the options they have available when it comes to social security. People tend to take benefits at the wrong time, and they’re consistently taking it earlier than they should.
Not putting money in a Roth IRA
Did you put money in a traditional 401K instead of a Roth IRA? We hear that regret a lot. People wish they knew the benefits of a Roth or knew it was available. The benefit is paying your taxes now instead of later.
Retiring too early and going back to work
Did you retire too early and discover that you need to go back to work and make more money?
You have to make sure you plan and are ready to retire. Sometimes working an extra year or two years can make a huge difference. But finding a part-time job can be difficult.
Listen to the full episode or use the timestamps below to find a specific segment, including mailbag questions from listeners.
2:19 – Getting out of the market
4:59 – Not knowing your risk factor
6:51 – Not knowing your social security options
9:15 – Not putting money in a Roth IRA
12:21 – Retiring too early and going back to work
15:30 – Mailbag: Should I try to get a tax refund?
17:12 – Mailbag: Redo our kitchen or save more for retirement?
Thanks for checking out the Retirement Reality Podcast. We’ll talk to you again next week.