5 Ways to Ruin a Perfectly Good Retirement Plan

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Source: http://www.flickr.com/photos/68751915@N05/

Source: http://www.flickr.com/photos/68751915@N05/

A retirement is probably the single largest and most valuable purchase most people will make in their lives, and — fortunately or unfortunately — you generally can’t take out a mortgage or a loan to finance it. This is why those who find themselves well-positioned for comfortable living come the age of retirement are generally the same people who, at the beginning of their working tenure, formed a retirement plan and faithfully executed it.

That is no small task. Nearly half of working-age American households have nothing or next to nothing saved for retirement. As John Bogle, founder of the Vanguard Group, has observed, the three pillars of the American retirement system — Social Security, the defined-benefit plan, and the defined-contribution plan — are all in terrible shape. In a 2012 report, Senator Tom Harkin (D-Iowa) observed that Americans are running a collective retirement deficit of $6.6 trillion.

The purchase that may be the largest and most valuable in the lives of many Americans is out of their reach, and not for the want of trying. Some Americans who form a competent retirement plan still fail to find themselves where they wanted come the age of retirement. Here are a few common pit falls.

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