Many times, women don't always put enough thought into their retirement planning. If your 401k is steadily growing, you are one step closer to being better off once you hit retirement age. However, are you sure that you have done everything to ensure you are going to be ready when that time comes? Here are some common mistakes you should avoid when it comes to your retirement savings.

1) Saving too little or no savings at all

Of course, the first mistake you should avoid is not saving anything at all, but saving too little can be just as bad. This often stems from not knowing how much you will need to see you through your retirement years.

There are a number of sources such as Financial Industry Regulatory Authority (FINRA) that can help you calculate how much you need for retirement.  Although retirement calculators are free online, these calculators do not consider your current expenses, life expectancy, taxes, investment returns and health needs.  Knowing the amount you will need to save can give you a good place to start.  Making minimum contributions aren't going to get you very far.

2) Cashing out your savings

Whether you are moving on to a new job or just being tempted to have the extra cash, cashing out on your retirement funds can be an unwise move. If you are under 59 ½) early withdrawals can cost you fees and penalties.

Early withdrawals are not needed if you are changing jobs. You can request your funds be rolled over to your new employer's plan without incurring fees and penalties. This will help you avoid paying any income taxes or penalties. This money is intended for your retirement and should remain invested until that time.  Resist the temptation to withdraw early or you might find yourself at a loss when retirement comes around.

3) Losing out on (free money) matching programs

Some companies offer a matching plan, which means they will match your retirement savings up to a certain percent. Many employers calculate the match in different ways.   For example, an employee may be required to save 8% of their salary to receive full company match. (Educate yourself on your company plan to avoid losing out on free money.  Do yourself a favor, make sure you know how much you need to contribute each year to earn the matching funds employee match.

4) Being too conservative   

Countless surveys show that women are risk averse when it comes to investing. Being too conservative with your money or holding too much cash can result in unintended consequences. What that means is that you won't have enough to live on in retirement, particularly when you consider that most women will be solely responsible for their own finances at some point in their lives, because of divorce or the death of a spouse.

By spreading your investments over a range of asset types you increase the likelihood of achieving an acceptable rate of return. Choose an optimal asset allocation strategy based on your age, goals, market expectations and risk tolerance.   

5) Not being proactive in tracking your retirement savings

Putting funds aside on a regular basis isn't always enough. This can give you the illusion that you are doing enough to ensure your retirement plans are on track. It is important to be monitoring your retirement investments and the amount that you are contributing. If you are vigilant about your retirement savings, you can be confident you are on track you will live a comfortable worry-free retirement.  

If you are having trouble keeping track of your retirement savings, or you are not confident you are making the right financial decisions you should hire a financial advisor who can assist you in selecting a diversified mix of investments suitable to your unique goals and needs. 

How do you keep track of your retirement savings?  
I would love to hear about your strategies........

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