The economy may be recovering, but some of the changes wrought by the Great Recession will be long-lasting. Anyone planning for retirement, no matter what their age, needs to take those changes into account.
People in their 40s and younger have some time to retool their plan, but baby boomers need to think with more urgency.
A lot of boomers had all of their retirement investments in the stock market and, if they didn’t lose their principal, it will take some time for them to recoup their gains. Others moved their money to short-term savings, like CDs. But with interest rates so low, they’re actually losing money when you factor in inflation.
Those are the two most common mistakes people make in retirement planning — having everything in either stocks or short-term savings is a bad idea.
Space your investments so they’ll come due as they’re needed. Plan some that can be available in the short-term, for emergencies, and others that will be available as you age.