Dave's Pick: "10 Nasty Surprises That Could Ruin Your Retirement"

Article published by FinanceBuzz.com

Written by Jenny Cohan and Edited by Michael Kurko

“You’ve tried to be responsible by planning for your retirement, but you may not be putting down the best foundation for your future. Sure, you may think you won’t be caught wasting your retirement savings and you may have already budgeted for future expenses, but there could be some surprises lurking that could spoil your plans.”

1. Losing money with high-risk investments

“It may be okay to take extra risks with your investments when you’re younger. Maybe you wanted to buy a stock that has been volatile in the past or you want to focus on a certain industry. You also have stock issued to you by your company that you want to hold on to.

“But as you get older, you may want to rebalance your portfolio with lower-risk investments. Think about switching to different stocks and how to diversify your portfolio to help you weather any market changes.

2. Less Social Security than you expected

“You’ve been putting money into Social Security for decades so it will be there for you when you retire. However, you may need to double-check your Social Security benefits and how much the government estimates you will receive when you retire.

“Also, remember that deciding when to start receiving your benefits could affect your monthly payouts. Social Security should supplement your monthly retirement costs, not cover all of them, so save accordingly. If you find that you’ll be short, look for creative ways to supplement your Social Security income.

3. Lower stock market returns

“More than half of American families have either direct or indirect investments in the stock market, and that number rises as adults get older. Unfortunately, when the stock market drops — particularly during recessions — you could see a drop in your returns as well.

“Review your strategy for investing money in stocks to make sure you can either weather market downfall without too much loss or hold on and wait for the market to recover. It could take months and possibly years for your investments to bounce back after a significant drop.

4. Less money to pay off debt

“You may have a good nest egg if you’ve been saving for retirement, but remember that your debt won’t retire when you do. Factor in any loans you still may have to pay off, such as a home mortgage or car loan, and take into account the length of those loans. A 30-year mortgage could be part of your retired life for decades to come. Also, consider any credit card bills you may need to pay off and how much you can comfortably put on your credit cards each month.”

Click here to read items five through 10!