No, that’s not a typo. Our goal is to describe the behaviors and missteps which can put someone in serious financial straits. No one will try to do this. Sadly, many people will experience serious financial difficulty in retirement -- and many of them could have avoided such a fate. Below are the most common mistakes. Hopefully, this reminder will help you avoid them. Author’s note: I have made a couple of these mistakes in my lifetime. I know well that no one is perfect.

1. Don’t budget – or don’t stick to the budget you created. Nerdwallet (here) reported that 25% of Americans don’t have a budget, and those that do often ignore the budget and overspend, with 40% running a credit card balance. Without a budget that you follow, or with significant credit card debt, it’s hard to meet your financial goals unless your income is so high it doesn’t matter.
2. Tell yourself that, when budgeting, “one off’s” are truly “one off’s” even when they are “two off’s” or “three off’s”. If you have a year with a large, unusual expense that blows through your budget, your budget could still be realistic. But if you have “one off’s” most years, assume your budget needs adjusting.
3. Don’t make a financial plan. It sounds so obvious: you’ll never achieve your goals without a plan. But most people don’t have a plan that quantifies their big financial goals like retirement, sending the kids to college or buying another home. Your plan should provide a roadmap for how you can afford those goals.
4. Ignore the risk you may need long-term care. A year of nursing care costs typically $100,000 or more. Morningstar estimates (here) that about 25% of 65-year-olds will need at least 2 years of paid nursing care before they die. Can you afford that? High net worth people can typically self-fund. Some people can get help from family members. But many people should buy long-term care insurance.
5. If you are a primary source of financial support for others, ignore the risk of premature death or disability. These are low risks, but if they happen, they can devastate your lives. That’s why, for many people, life and disability insurance are critical.
6. Take Social Security as early as possible. You can take your monthly benefit as early as 62 or as late as 70. The longer you wait, the higher your benefit will be. The average age people start their benefit is 65 – which for most people is a mistake. If you live past age 82 or 83, waiting to claim until age 70 is typically the best strategy. There is no better source of inflation-adjusted, risk-free income which will last your life.
7. When the stock market goes down, sell. There is no surer way to damage your finances than selling after the market falls. Historically, the stock market has always recovered. But you must stay invested to enjoy that rebound, instead of turning a temporary loss into a permanent loss.

Hopefully, by seeing what not to do, you will avoid these common, and sometimes disastrous, mistakes.