David McKnight explores the five biggest retirement mistakes people make. When it comes to retirement "traps", the obvious things such as picking the wrong stock, missing the next bull market or retiring at the wrong time are what typically comes to mind… The first mistake people tend to make when it comes to their retirement is believing that tax diversification is good enough. "Having the bulk of your wealth in tax-deferred accounts is like going into a business partnership with the IRS: every year, they get t...
David McKnight explores the five biggest retirement mistakes people make.
When it comes to retirement "traps", the obvious things such as picking the wrong stock, missing the next bull market or retiring at the wrong time are what typically comes to mind…
The first mistake people tend to make when it comes to their retirement is believing that tax diversification is good enough.
"Having the bulk of your wealth in tax-deferred accounts is like going into a business partnership with the IRS: every year, they get to vote on what percentage of your profits they get to keep. Not a very good business partnership, if you ask me," says David.
The next mistake is one of the most subtle and expensive mistakes retirees make: ignoring the standard deduction when doing Roth conversions.
The third big retirement mistake people make is trying to time the market instead of timing the tax code.
Remember: "Markets move up and down, but when a country is in a debt crisis, tax rates only move in one direction: Up!"
Are you using bonds as safe money in retirement? That's what the fourth retirement planning mistake David has encountered often in his busy work schedule.
David suggests to time the tax code, instead of timing the market…
Replacing your bonds with annuities that have a guaranteed lifetime income feature is something you should consider.
The fifth and final mistake to stay away from is not taking enough risk in retirement.
David explains that your annuities can provide income in the year after a down year in your stock portfolio. That gives your stocks a chance to recover before you take further distributions.
Don't forget, the stock portion of the portfolio has one job and one job only: Make sure your money lasts a full 30-year retirement.
Mentioned in this episode:
David's new book, available now for pre-order: The Secret Order of Millionaires
David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track
Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Tom Hegna
