5 Common Retirement Planning Missteps — How to Avoid Them

With rising costs of living and the general uncertainty around what the economy will look like in your retirement , it can be tough to build an adequate nest egg for your golden years. Planning is critical and can’t be avoided if you’re looking to ensure a comfortable retirement.

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But retirement planning can be complex and everyone’s situation is, to some extent, unique. Unfortunately, many of us are prone to making mistakes along the planning journey. What are the most common retirement planning missteps? GOBankingRates spoke with financial experts to find out.

Here are some tips to avoid financial planning missteps during your golden years.

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Waiting Too Long to Plan

Aaron Cirksena, founder and CEO at MDRN Capital finds that the most common retirement planning misstep revolves around the issue of timing. Too many people wait too long to start building out their retirement plans. Start as young as you can.

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“It is never too early to start thinking about retirement strategies,” Cirksena said. “When you are in your 20s and 30s, it may seem like you have a while before you need to think about it, but in reality, that should be a time to be aggressive with your savings and investments to set you up for long-term success once retired.”

Having Debt and Underestimating Your Cost of Living

Another common retirement planning misstep Cirksena sees is retiring with debt while underestimating your cost of living. Pay off your high-interest debt ASAP.

“Once you are on a fixed income, it is important to have all of your high-interest debt paid off so you can live more comfortably,”  Cirksena said.

Not Prioritizing Contributions to Investments

To enjoy a comfortable retirement, you need robust investments. Too often, folks don’t prioritize making these.

“Easily avoid this by maximizing your contributions to IRAs, 401ks, etc,” Cirksena said.

Deferring Taxes for As Long As Possible

Most retirees have spent many years amassing tax-deferred retirement savings in their 401(k)s and may hold additional tax-deferred investments like annuities or savings bonds. People often make missteps here by deferring these taxes for as long as possible.

“As you get into retirement, your ability to continue to defer taxes is going to end, and if you wait until your mid-70s, it may be hard to fix the problem as RMDs (required minimum distributions), Social Security and other sources of retirement income all begin,” said Matt Hylland, financial planner, investment advisor at Arnold and Mote Wealth Management .

“A good retirement plan also looks at tax planning, and many retirees have really good options early in retirement to get ahead of the tax liability that awaits,” Hylland said. “A Roth conversion plan may help get money out of these tax-deferred accounts early in retirement. Or, maybe you can prioritize withdrawing from your 401k or IRA early in retirement to reduce account balances and get money out at favorable tax rates. As a bonus, this may also allow you to more comfortably delay Social Security to get a maximum benefit.”

Not Considering the Possible Need for Long-Term Care

Hopefully, you will be blessed with good health as you age, but there almost always comes a point where you just can’t get by independently anymore and need ample support. Many people don’t think about the possible inevitability of needing long-term care when planning for their retirement and this is a dire mistake.

“Planning for long-term care is crucial, even if it isn’t the most exciting part of retirement planning,” said Ohan Kayikchyan, Ph.D., CFP, founder of Ohan The Money Doctor . “Addressing this need can provide peace of mind about your future, allowing you to enjoy your retirement fully. Ignoring it could jeopardize your financial security and overall well-being. The chances of qualifying for coverage at age 60 or 30 are very different; the key here is not to wait and explore the options available now.”

This article originally appeared on GOBankingRates.com : 5 Common Retirement Planning Missteps — How to Avoid Them