All of those can affect a person’s ability to, first, devise a consistent plan for their retirement goals, and secondly, accumulate the necessary capital to provide ample retirement income. hieve them. Meanwhile, costly mistakes can be made that will have implications down the road.

“A retirement strategy has many moving parts, and each can have a significant impact on the others,” says Jadon Newman, CEO of Noble Capital (www.noblecapital.com), a financial advisory firm. “Many people often make the same mistakes.

“There are ways to avoid them, and much of it is about knowledge. There’s more you need to know about retirement today than you did 20 or 30 years ago. It starts with knowing what lifestyle you want to achieve in retirement and the options that will both protect you and enhance what should be the best years of your life.”

Newman gives four common mistakes in retirement planning and how to avoid them:

• Investing like you’re still young. Earlier in their working careers, people often have a higher risk tolerance. But approaching retirement, Newman says, your investment strategy should shift toward preserving capital. “Phase out those investments that are subject to wider fluctuations,” Newman says. “The gradual move away from riskier investments should begin as you enter your mid- to late 40s.”
  •    Leaving your nest egg vulnerable to big market drops. Putting your entire nest egg in one basket could be disastrous. “Having an excessive amount of market risk in your portfolio, you could find yourself suffering a loss that you won’t have time to recover from before you retire,” Newman says. “With stocks having surged for an extended period, beware the bear market. It would be wise to purge some risk from your portfolio in favor of more predictable methods of capital growth and income, such as annuities, life insurance policies, or alternative investments like private lending and real estate.”
  •    Not satisfying basic income needs. It has become less realistic for a 401(k) coupled with Social Security to provide the regular income needed for retirement. It’s important to estimate what yearly expenses will be in retirement and diversify accordingly. “Use your investments, insurance policies or retirement accounts to provide multiple income streams,” Newman says. “This allows you to draw from them only what you need to meet your pre-determined budget. Be sure you calculate your Social Security payment and any required minimum distributions so you don’t incur additional tax liability.”
  •    Having the wrong kind of annuity. A crucial component of a comfortable retirement is reliable income, and a common way to achieve that is by using annuities. Unfortunately, some retirees find themselves with an annuity that doesn’t fit their needs. A fixed annuity pays out a guaranteed rate of return, providing less risk compared to variable annuities, but the tradeoff is you get a more modest return. “Sometimes a fixed index annuity (FIA) is the best bet,” Newman says. “These allow you to protect your principal by shifting the risk to the insurance company selling you the annuity. There are caps on your potential returns, but FIAs are more reliable because they mitigate risk.”
  “With retirement planning, the end goal should be not only to ensure you’ll have enough income to satisfy your retirement budget, but also to provide you with enough to truly enjoy your retirement,” Newman says. “Because life goals and the economic climate are subject to change, you need to consult with your financial adviser annually to optimize your strategy.”