Many people will not have as much money in retirement as they expect because they are not considering what money they will have to pay taxes on when they get the retirement distributions. They also are forgetting inflation will cut into their income, Klein says.

“Taking Social Security early because it is easy is a potentially big mistake,” he adds. “Deferring taking Social Security to let the benefits grow is usually better.”

But this is another issue financial advisors should look at for their clients,” explains Larry Rosenthal, president of Rosenthal Wealth Management Group in Manassas, Va. “I had a client who was going to defer Social Security, but to do that he would have had to use money from his portfolio until he reached 70 and his Social Security benefits were at their peak.”

Rosenthal ran the numbers for the client and his money lasted longer by using Social Security sooner and letting his savings grow.

“If the numbers show a client is going to run out of money in retirement, there are things he can do: save more money between now and retirement, retire on less, work longer, or take more risk in the portfolio. The last is not usually the best option,” he adds.

Many people approaching retirement have a desire to be debt free, says Ken Sutherland, founder of LifePlan Group in Raleigh, N.C. They want to take money from the 401(k) or IRA and pay off the house, the car or other debt.

“That’s going to push you into a higher tax bracket for that one year. Look at the alternatives first,” including possibly keeping the debt.

To avoid mistakes, everyone, even younger people, should hire an advisor to review their finances and their goals, says Rosenthal. “Even if it is only once a year, hire someone by the hour once a year to get that advice.”

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