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The 5 Biggest Financial Mistakes I See

The 5 Biggest Financial Mistakes I See

| May 13, 2021
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There are many different ways that people prepare for their retirement. Some people implement healthy financial habits early that generate solid financial outcomes and strong wealth management plans. Others don’t know the best ways to prepare for retirement or are not able to utilize the best strategies, for whatever reason. 

We at Bridgerland Financial want clients to use the best strategies when it comes to retirement planning, but we have also noticed some big financial mistakes that some people make when preparing for their retirement. Below, we have listed the top five biggest financial mistakes that we see when new clients come to see us in hopes that you can avoid them as you build a financially stable future. 

1. Not Utilizing Matches On 401(k)s

It goes without saying that you should take full advantage of matching 401(k) programs that your employer has set up. This is because you lose out on potentially thousands of dollars in retirement if you don’t take full advantage of this program. Many employers match up to 50% of what you put into your retirement account and some even have a dollar-for-dollar match program, in which your employer puts in the same amount you do. There are IRS limits to what you and your employer can contribute to a 401(k) together, which is 100% of your salary or $57,000. If you are over 50, then the combined limit increases to $63,500. (1)

2. Believing That Financial Planners Are Too Expensive 

Many clients delay using a financial planner because they believe, erroneously, that financial planners are too expensive. There are financial planners for every budget, and you don’t need to spend a ton of money to get your finances in order. Additionally, it is important to think of your financial planning expense as a long-term investment. Any expense that you pay out today implementing healthy financial habits is going to pay out dividends in the long run. 

3. Not Planning For Long-Term Care Costs

As healthy as you and your spouse are now, it is difficult to imagine a future where one or both of you may need long-term care or in-home assistance. However, most Americans will need long-term care as they age, with some statistics suggesting that more than half of people over the age of 65 years old will require significant long-term care services. This cost is not cheap. The average monthly cost in an assisted living facility is around $4,300 but could be much higher depending on the services you require. (2) 

4. Not Understanding Diversification

Many people understand the importance of diversifying your investments, but less well known is the importance of time and tax diversification for your wealth management plan. A comprehensive wealth management plan includes time and tax diversification as well as investment diversification. 

The idea behind time diversification is that by withdrawing from the correct account at the right time, you will avoid depleting your retirement by withdrawing funds when the market is going through a slump. With tax diversification, retirees use certain tax-advantaged retirement accounts to hold assets that they are withdrawing from.

5. Waiting To Plan For Retirement

When people wait until the year before they retire to start planning for retirement, they may be in for a few disappointing surprises. Proper retirement planning takes years. When we meet with people earlier in their careers, we can implement healthy financial habits that will help their retirement accounts accumulate the wealth needed for them to retire in the lifestyle that they are accustomed to. Unfortunately, if someone decides to start planning a year before retiring, they are limited in the options or strategies they can implement to build a healthy retirement. People who find themselves in this position often have to work a few more years in order to build a more stable retirement. 

We Can Help

It’s easy to make financial mistakes. However, if we catch them early enough, it’s also easy to correct them. Are you thinking about your retirement plan? We’re here to help. Schedule an appointment online or reach out to us at or (435) 535-1630.

About David

David Packer is founder and financial advisor at Bridgerland Financial, an independently managed financial firm in Utah. With 20 years of industry experience, David serves his clients by helping them bridge the gap between their working years and their retirement. He provides tailored, comprehensive financial plans to his business owner and individual clients so they can retire with confidence. David has a bachelor’s degree in finance and holds the Chartered Retirement Planning Counselor℠ (CRPC®) credential. Outside of the office, David loves to spend time with his wife and five kids and stay involved in his community. He currently serves on the board of directors of the Cache Valley Chamber of Commerce. He and his wife, Melonie, spent years as foster parents and eventually adopted their foster children. David loves playing and watching all kinds of sports, including officiating high school sports, and won’t turn down a good board or card game. Learn more about David by connecting with him on LinkedIn. You can also register for his recent webinar, What We Do & How We Help here.




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