8 retirement planning mistakes to avoid

(The following is excerpted from Your Complete Guide to a Successful and Secure Retirement by Larry E. Swedroe and Kevin Grogan. Published by Harriman House. Copyright (c) 2019. All rights reserved. This book is available at all bookstores and online booksellers.)

To have a successful and secure retirement, you'll want to avoid these eight retirement planning mistakes:

1. Underestimating your needs. The average person will need to replace 80% to 90% of their pre-retirement income in retirement.

2. Overestimating your ability to continue working. People frequently retire early, often for good reasons. Unfortunately, there are also negative reasons (such as having to leave the workforce due to health reasons, loss of job or having to take full-time care of a spouse or elderly parent). A good retirement plan considers contingencies, including the need for disability insurance.

3. Becoming too conservative with your investments. Unfortunately, too much of a "safe" thing may not be safe because of the risk of inflation, especially for those with pensions without inflation adjustments. While the return on bonds can be eroded by inflation, stocks provide better long-term protection against the risk of unexpected inflation.

4. Underestimating your tax rate. People often assume that their tax rate in retirement will be lower than actually proves to be the case.

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