Buy Like Buffett: Three Retirement Planning Don'ts

I thought I would take a contrarian look today at the biggest things that keep most people from retiring. Very few people knowingly plan for their financial life to be in shambles. Sometimes just neglecting to make a few simple decisions can basis that wreak havoc in your financial life. The best way to keep yourself from falling into a financial trap is by knowing exactly what signs to look for.

Here are 3 ways to ensure that you will be working well into your golden years.

1. Procrastinate, procrastinate, procrastinate.
   
   Put off your retirement savings plan until much later. There is no reason to do today what you can do tomorrow. You can always begin saving for retirement in your 60's. Or maybe you will hit it big by finding a winning lottery ticket. If you think that this is true then you are sadly mistaken. You can never catch up on the years that you let slip away. So, make a decision to start saving for retirement today and stick to it. There is no time like the present to build your financial future.


2. Do not make a plan.
   
   The old adage that those who fail to plan, plan to fail is not true. You are the one person that it does not apply too. You believe that failing to make a financial plan will not decrease your chances of reaching retirement. This is not the case. The number one mistake that most people make in retirement planning is underestimating exactly how much money they will need to retire. An underfunded retirement plan forces many senior citizens to return to the workforce. If you wish to avoid this predicament, you should make a financial plan and check your progress every year. You are far more likely to reach your retirement goals with a plan.


3. Treat your 401(k) like a piggybank.
   
   It seems like a great idea to borrow money from your 401(k) to buy a new 3D TV for your living room. Not only can you watch movie after movie but it will impress your neighbors as well. Sadly, the 401(k) plan is the first place that people raid when they need extra cash. Whether it's for buying new living room furniture or borrowing money to buy a new car; too many people dip into their 401(k) plan far too frequently. Withdrawals from your 401(k) should only be used for absolute hardships such as saving your home from foreclosure.

If you find yourself making any of these mistakes then it may be time to reassess your financial goals.

Are you on track when it comes to planning for retirement?

Mark Riddix is the founder and president of New Horizons Financial Management, an independent investment advisory firm that provides personalized investing and asset management consulting. Mark is a regular contributor to Seeking Alpha and has written financial columns for Baltimore and Washington, D.C. area newspapers. Mark publishes his own financial blog, BuylikeBuffett.com and has written the book Your Financial Playbook.