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- Saving for retirement is a huge undertaking that takes years of planning, saving and strategizing.
- In Insider’s Real Retirement series, we ask ordinary people what they wish they knew about approaching or getting ready to stop working in retirement.
- The retirees featured below made it to the finish line, but they made a few mistakes along the way and looked.
Saving for retirement isn’t always smooth sailing.
In Business Insider’s Real Retirement series, retirees share their best advice on retirement, what’s worked for them, and what sometimes doesn’t work for them.
From investing too much of their portfolios in the stock market, to starting too late, these three retirees share mistakes they’ve made that could impact their retirement.
See insider picks for the best retirement plans »
1. Don’t put too much risk in your portfolio
Dirk Cotton, a former AOL employee, retired between the burst of the dot-com bubble and the onset of the Great Recession.
Keeping a portfolio fully invested in the stock market carries the risk of losing significant amounts of money, which can be a problem if you don’t have time to recoup those losses. When the stock market crashed in 2008, Cotton said, many people struggled with this.
“Many people have 100% in equities while saving for retirement and lose over 50% in a very short period of time,” he said.
He advises people to work with a financial planner to determine the right balance for their portfolio. “Find a good financial planner or retirement planner, and start reducing your equity allocation with a goal of 40% or 50% when you retire,” he says.
2. Don’t put off saving
David Fisher, who retired at age 65, didn’t think much of retirement when he was younger. “I started late. From ’33 to ’43, the quarterly statements I got from TIAA, I threw them away,” Fisher told Business Insider.
Fortunately, his employer has been putting money into his retirement account the entire time. “After a year or so, you’re vested and they put 6.2% of your gross pay into your 403b retirement plan with TIAA, whether you put in a nickel or not.”
When he was in his mid-40s, he opened one of the statements. I said, “Oh my goodness, I have $30,000 to $35,000. That’s my money.”
It should be noted that not everyone is so lucky: Most employers only contribute to your retirement plan while you do, and even then only up to a certain amount (if they do). If your employer offers a match, most experts recommend contributing as long as you need to in order to get the full match.
3. Don’t overlook the power of passive income
Corky and Patty Ewing didn’t make more than a middle-class income living in Southern California, but passive income made retirement not only possible but comfortable. They own four properties: three rentals and where they live.
But they want to buy more. If they could turn back time, they say, they would have bought more properties and set up more passive income streams to fund their retirement.
“We never made a lot of money,” Corky told Business Insider. “But, through the power of compound interest and appreciation in stocks and rentals, we’re in a pretty good position now. It’s amazing to both of us.”
