retirement
8 ways to ruin your chances to retire

5. Overestimate portfolio earnings 

Compounding interest is indeed magical. A little money plus a lot of time can equal a lot of money. But there's only so much it can do with the variables involved.

Retirement hopefuls who dillydally in their savings efforts may find the time portion of the equation so drastically reduced as to be somewhat ineffectual without lots of money thrown in.

Similarly, young people whose savings start strong and then taper off might find that they could have accumulated much more money had they just saved more consistently over time. Plus, failing to account for market volatility could have would-be Warren Buffetts wishing they had put most of their money in CDs some days.

People sometimes assume constant growth rates, says CFP Paula de Vos, president of Synergist Wealth Advisors.

"They overestimate the amount of certainty in an uncertain world, and it's something you have to maintain vigilance over," she says.

6. Miscalculate lifetime earnings 

Some optimistic people assume that one day their paltry income will catch up with their spending and they'll finally have more than enough money to pay their mortgage off, save for retirement and pay down debts.

"The economy has been pretty nice to us over the past 10 or 20 years, and kids don't know what it was like in tough bear markets," says Dallas-based CFP Chanc Woods, member of the Financial Planning Association.

"The great Depression was so long ago that kids don't know how difficult the job market can be, or how bad the economy could get. Everyone knows that they should have three to six months of expenses saved up, but instead everyone is trying to be cool and buying nice cars and clothes," he says.

Times have changed, thoughl and we may be in for hard times. No longer can people assume that things will get better and the worst will never happen. If you do, there's a pretty good chance you'll find yourself broke and trying to catch up. Probably well before retirement.

7. Adopt the ostrich-style planning approach 

If you've been able to tune out advertising messages and instead accidentally scrimped and saved for your golden years and find yourself doing pretty well, don't worry -- there are still plenty of ways to go wrong.

For instance, without a plan for every aspect of retirement, things can go seriously awry. From long-term care needs to the death of a spouse, any number of factors can derail a plan. The what-ifs could keep a less sanguine person up at night.

"Part of a retirement plan is knowing that we're saving this much every month and we're 35 and at a 5 percent return in 30 years we're going to have all this money," says CFP Ralph Lunt, vice president and chief financial officer at Strategic Capital Advisors. "Well, what if one of us isn't here next month?"

Term life insurance may provide some peace of mind here by providing funds to a surviving spouse or children.

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Any catastrophe can potentially change long-term financial plans irreversibly. "Just in the state of Texas, an assisted-living facility, nursing home or home health care runs about $150 to $170 a day just for the care. The average need is just over three years," says Dallas-based CFP Chanc Woods.

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