5 Common Planning Mistakes You Can Easily Fix

Benjamin Haas |





Sometimes progress is as much about knowing what NOT to do, as it is about figuring out what to do. The path to growing wealth takes some basic building blocks, but it also requires avoiding certain mistakes along the way.  You may not think a lot about it, but small missteps can have big, negative impacts on one’s wealth accumulation over time. 

So try to eliminate those wealth-destructive errors and omissions that even financially conscientious people sometimes make. 
Here are five common planning mistakes I see that you can easily fix.


1. Not holding enough cash.  With yields on cash at historical lows, it may not feel right to park your financial reserve in cash But in our financial plans, cash isn’t meant to be a return generating asset. It’s meant to be a liquid asset available for emergencies or opportunities. Don’t get caught investing all of your reserve, only to later find you need access to those funds during a market downturn. At that point, liquidation means you’ve turned market volatility into realized loss. Keep adequate cash on hand at all times.

2. Not rebalancing investments.  By not rebalancing investment holdings back to target allocations, portfolios get inherently riskier over time – heavier in higher returning, more volatile investments, lighter in the more defensive, slowing growing assets, meant to help stabilize an account through difficult markets.  Most accounts provide an option to have this done automatically. Consider this option so you don’t get caught with an account riskier than you originally intended, especially after the growth we’ve seen in the equity markets these last couple years.

3. Not confirming beneficiary designations. It’s common for me to see a bank account with no beneficiary. Or to find an outdated will. I also see people use a common beneficiary designation called “children in equal shares,” which is used by an individual who is trying to be “fair.”  However, if one child should predecease you, and this child also has children, the result of a simple “children in equal shares” formula would be to disinherit grandchildren: likely an unintended consequence.  Review your designations and check first with an estate-planning attorney for the exact language to achieve your desired result.

4. Not saving up to the match in your employer plan.  Gone are the days of a company pension being your retirement paycheck. To accumulate enough for retirement, the onus is on you to save. Using an employer-sponsored defined contribution plan such as a 401(k), 403(b), SIMPLE IRA, etc. is one convenient way to save. Employers often incentivize these savings by matching your dollars as part of a benefits package. To not take advantage of this benefit is leaving money on the table. Be sure you understand their match, and fully take advantage of this savings opportunity.

5. Working with a financial advisor without verifying his or her credentials, background, training, and experience.  All too often, consumers think they are getting advice, when instead they are being sold a product. That’s like taking nutritional advice from your butcher, instead of a dietician! If asked, the butcher is going to sell you meat, regardless of your health. By choosing a CFP® professional, you have the confidence that the advisor is required to offer financial planning advice that puts the interest of you, the client, first. 


Should you need help managing your financial plan, give us a call. We’re here to align your personal values, vision and wealth, which starts with helping ensure you avoid these common planning mistakes.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

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