ETF Store Insight

Costly Mistakes Can Derail Retirement

May 29th, 2013 by ETF Store Staff

Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.

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On our most recent radio broadcast, we walked through the 8 common mistakes that retirees make as outlined by Paul Merriman on The Wall Street Journal’s Marketwatch.  At The ETF Store, we spend a great deal of time focusing on ETFs and ensuring our client portfolios are properly positioned, but we also work with clients to put together comprehensive financial plans to help them reach their financial goals.  For retirees, this process includes discussing all of the key factors that go into a financially successful retirement.  There are many potential pitfalls that can derail your retirement and any one of these pitfalls can have disastrous results.  On our show, we discussed each of the pitfalls listed in Mr. Merriman’s article and explained how you can avoid them:

  1. Failing to develop a budget.
  2. Failing to budget predictable expenses such as income taxes or home repairs.
  3. Basing your standard of living on unrealistically high returns from your investments.
  4. Withdrawing more money from your retirement portfolio than your portfolio can support over the long-run.
  5. Overreacting to bear markets.
  6. Hanging on to risky investments for too long.
  7. Purchasing illiquid investments.
  8. Giving away too much money to either charities or children.

In our weekly market update, we delved into gold and Japanese equities, two areas that have garnered a lot of media attention recently and both of which have been significantly impacted by central bank monetary policy.  We looked at what’s next for both assets and explained how, as always, proper portfolio diversification can allow you to sleep at night regardless of how these assets perform.  Speaking of portfolio diversification, in our weekly ETF Spotlight segment, we examined a broad based, developed international equity ETF (iShares Core MSCI EAFE ETF – ticker symbol IEFA) and explained how international equity exposure can offer diversification benefits to your portfolio.  Learn more about IEFA at www.etfbuzz.com.