Many people enjoy a good horror movie. They sit on the edge of their seat or hide behind a blanket in anticipation of what will happen next. But when it comes to your retirement, the thrills and chills are much less entertaining.

Retirement planning is like navigating a complex maze. One wrong turn can lead to unforeseen consequences and force you to backtrack, costing you money and invaluable time. Only 31% of non-retired adults believe their retirement savings are on track. That's a daunting statistic. So, when it comes to financial management, avoiding retirement planning mistakes is critical for a secure and stress-free future.

While most people are eager to have more free time when their working days are behind them, others find themselves in a bleak situation they weren't expecting.

Several financial missteps derail retirement plans:

• Quitting a job without considering your employer's vesting schedule
• Lacking a financial plan
• Not maximizing company 401(k) matches
• Relying too much on Social Security
• Investing unwisely
• Poor tax planning
• Accumulating debt
• Underestimating health care costs

And those are just a few common mistakes that can derail a retirement plan. Below are five horror stories where ambitious retirement dreams quickly became nightmares.

1. Outliving Your Money

The prospect of a long life sounds great, right? But with a long life comes a long retirement. According to the Social Security Administration, if you and your spouse live to be 65, there is a 1 in 4 chance that one member of a couple will live to be 95.

Running out of money is a scarier prospect than dying for most Baby Boomers and Generation X, according to a study by Allianz Life. Research shows that 8 percent of people in the top income quartile run out of money if they are retired for 20 years.

There are a couple of explanations for this. First, people spend more in their first few years of retirement than when they are working – they finally have the time to travel, explore hobbies, and check off bucket list items. Second, they fail to create a budget or to follow their budget.

Some people simply outlive their own expectations when it comes to the duration of their retirement. An intuitive retirement income calculator can be an invaluable resource to help with your planning.

2. Getting Stuck With Bigger RMDs Than You Need

Nothing will drain money from your retirement savings faster than getting hit with a high tax bill. The IRS mandates that owners of a qualified retirement savings account, such as an IRA or 401(k), must begin taking distributions out of those accounts at a certain age. These distributions are called Required Minimum Distributions (RMDs). And they are scary in their own right because they have the potential to put you in a higher tax bracket.

Many people take full advantage of their employer contributions to a 401(k) or 403(b), and that is generally the right move. But being over-invested in tax-deferred accounts means you might be taking on more money (and tax liability) than you want, starting at age 73.

3. Timing Social Security Wrong

Next to the possibility of running out of money, Social Security is one of the greatest fear inducers for people approaching retirement. Take it too early, and you might not have enough income to meet your retirement goals. Start too late, and you might miss out on years of payments.

Take an honest assessment of your health. If you are active and healthy, it might make sense to delay your benefits. Consider your financial resources, and whether you need additional income sooner rather than later. Consider your spouse’s retirement age and health, and work with your financial advisor to make Social Security a less frightening proposition.

If you want a second opinion about your retirement plan or want to check your retirement readiness, click here to schedule an appointment with one of our team members.

4. Being Unprepared for Medical Expenses

The sheer unpredictability of health care in retirement can seem scarier than the health problems themselves. A healthy couple retiring today can expect to spend $363,946 on health care during their retirement, so even small deviations from the average can impact your nest egg.

Plan ahead. Consider a Health Savings Account (HSA), which can be used as an investing tool if you remain in good health. Long-term care insurance is increasingly available through employers and life insurance policies. Do everything you can to take the guesswork out of one of your biggest expenses in retirement.

5. Inflation Devouring Your Investments

At the moment, there are no such things as zombies. But if you are over-invested in retirement vehicles with a low rate of return, you can expect inflation to eat away at your retirement savings.

As you get closer to retirement, it often makes sense to move your money into safer investments. Defensive investing is an important strategy, but if you play it too safe, you’ll find that your investments are losing money for you when you need to generate wealth.

Charting a Course to a Fulfilling Retirement

Your time spent during retirement should be filled with things you love, not financial uncertainty.

Don’t become a character in these horror stories. You can avoid these critical retirement planning mistakes by adopting a strategic approach. It's about making informed decisions today that pave the way for a worry-free tomorrow.

And take complete control of your retirement planning. Schedule a free consultation with Wealth Enhancement Group. Our team is dedicated to guiding you through the intricacies of retirement planning. Contact us now and start your path toward a secure and prosperous retirement. 

The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article originally appeared in the Pioneer Press. You may view the article here.