Creating and following a to-do list can help in planning. Sometimes a “do-not-do” list can be equally important.  

During National Save for Retirement Week, consider reviewing these common pitfalls with your clients to position them for a more financially secure retirement in the future: 

1. Impulse investing: Avoid investing based on a whim or a tip. Don’t invest a certain way just because a friend or colleague does. Instead, be thoughtful and strategic. 

2. Not having a vision for retirement: Take some time to thoroughly think about what you want your retirement years to be like. How do you want to live and what do you value most? 

3. Not paying yourself first: Retirement savings should be a top priority. Put money aside with every paycheck. It’s easy to do through payroll deduction or a similar automatic system. 

4. Not taking advantage of time: Compound growth is like a gift from Father Time. Start saving for your retirement now and you gain an opportunity for tremendous potential growth. That way, you may not have to save significantly more later in your career, when many financial needs compete for your attention and your budget. 

5. Not paying attention to risk: Risk and return tend to go hand-in-hand. Investments that offer higher potential returns, such as stocks, have elevated levels of risk. Conservative investments, such as money market funds or stable-value investments, fluctuate very little but offer limited growth potential. Think about risks as well as expected returns. 

6. Not diversifying: The more concentrated your investments, the higher the risk of a substantial loss. Limit your risk by owning a variety of investments, and don’t invest too heavily in your employer’s stock. If something should happen to your company, not only will your job be in jeopardy but your investments will be as well.   Take time to review your investments at least quarterly to make sure they are performing roughly as you expect them to do. If they are not, try to understand why, and be ready to make changes if you need to. 

7. Not working together with your spouse: By talking about their individual financial goals and coordinating their investing strategies and budgetary practices, couples are in a better position to optimize their financial resources for retirement – but it’s important to be on the same page in terms of future goals and risk tolerance. 

8. Not maximizing your retirement plan: If you are fortunate enough to have an employer-sponsored retirement plan, take advantage of it. If you receive a matching contribution from your employer, contribute at least enough to the account to qualify for the full match. Anything less is like walking away from free money. 

9. Cashing out or borrowing from your 401(k) account:  In a financial emergency, you might have no choice but to make an early withdrawal from your 401(k) retirement account. But it’s like borrowing from your future to pay for your present needs. Look for alternatives before you resort to an early withdrawal. 

10. Ignoring taxes or inflation when estimating your net retirement income: For anything other than a tax-free account, such as a Roth IRA or Roth 401(k), you’ll owe taxes on your withdrawals. Remember that inflation will reduce your purchasing power as well. 

As a financial professional, you play a crucial role in your client’s financial wellbeing. According to a recent Guardian study, those who sought help from a financial professional reported higher confidence when it comes to knowing how to calculate how much money they need in retirement, having enough money to cover health care expenses in retirement and being ready for retirement financially.