Are You Making These Three Mistakes With Your Retirement?

When it comes to retirement planning, it can seem tedious and in some cases uneventful. I mean, unless you’re a math nerd, who wants to have to think about numbers, trajectories, compound interest, rate of returns, etc? On top of all that, can we even rely on or plan in an unstable market?  For some people, retirement is a dream for the very distant future. For others, it seems bleak to say the least. Here’s the good news, it’s never too late to start working a plan for your retirement. I want you to look at your retirement like owning a car. There is going to be some maintenance to keeping it in top notch performance. Your retirement plan is exactly the same and if you are making any of these mistakes, you could be jeopardizing the safety of your retirement dream.

Related - Baby Step 4. Start Investing

1. You Don’t have a Plan.

The great Zig Ziglar said this, “If you aim at nothing, you will hit it every time.” This couldn’t be more true when investing for retirement. Setting a retirement goal is going to cause you to set a plan for your money. Remember managed money works harder and whether you like it or not, you’re the manager! So it's time to get on a plan for your money.

Setting a goal means that you have a timeline and an action plan to get you to the goal. For example, if you’re in your mid 20’s and plan to retire at age 65, I know it’s really far in the future, but what you do today, will affect the outcome in 40 years. So let’s say you set a goal to retire a millionaire, a very attainable goal. With the stock market averaging a 10% return over the last 40 years, you would need to start investing $200 a month. Did you see how I did that? 

  1. I set a goal - To retire a millionaire.
  2. Based on research, I came to the conclusion that the stock market has averaged 9.6% over the last 40 years.
  3. Based on a 9.6% return and 40 years (age 25-65) to grow my money I need to invest $200 every month.

2. Relying Solely on C.P.P/ O.A.S

If you aim at nothing, you will hit it every time.
— Zig Zigglar

 The second mistake I hear a lot of people say when it comes to retirement, is their plan is good old C.P.P -  Canada Pension Plan. Now there’s nothing wrong with collecting CPP if you’re entitled to it. However CPP should be the icing on your retirement cake. In reality, relying solely on CPP isn’t much of a retirement dream. 

At the current 2016 rate you can expect a payout of $1092.50 per month. Do the math, that’s $13,110 a year. You could add another P on the end and call it Canada’s Poor Performance Plan. Not only is CPP a poor plan for retirement, but our government makes it mandatory for Canadians to contribute. The current contribution rate is 9.9%. Knowing that you can contribute just $200 a month to become a millionaire, I find it frustrating that CPP continues to under perform and over reach into our pockets.

3. Listening to the noise.

  The third thing I see a lot of people do is what I call “Listening to the noise.” They hear reports about the economy on the news and plan their investing based on what they hear. Have you read the book Henny Penny, better known as Chicken Little? If you did, you were probably a kid. Yes it’s a children's book, but the story is relevant to how we act today. The famous line in Henny Penny was "The sky is falling.” Sound familiar?.. I find a lot of people act like this when they watch too much news. We saw it in 2008 when the world was heading into “economic doom and gloom.”  Sounds pretty ridiculous right? We survived and the markets recovered. If you stayed in the markets, then you got to take advantage of the rebound because the markets performed and grew to higher levels than before 2008.

Managed money works harder.
— MikeCroftsDaily

 Keep in mind that bad news networks are a 'for-profit' business. These networks know that if they can get you glued to the screen, their ratings go up. When ratings go up, their advertisers are happy and are willing to pay top dollar to be put in front of you. What’s the best way to keep you watching the news?.. Shock value, fear and scarcity. Am I saying not to watch the news?… No, but you do need to limit how much you’re letting it influence your decisions. I never want you to make a decision based on fear or scarcity. So when it comes to watching the news, don’t take your investment advice from them.

Get your advice from a professional.

If you’re falling into any of these three mistakes, it might be time to get a tune up done for your retirement. With the help of a financial coach, we can steer you in the right direction and send you driving off into the sunset with your retirement dreams. Connect with a financial coach today to boost your retirement dreams.

Certified Financial Coach and event speaker, Mike is passionate about teaching others how to take control of their finances. Mike’s message is simple: Get intentional, work a plan and live debt free! Follow Mike on Instagram @MoneyCoachMike and at