Avoid these retirement planning mistakes

It's not hard to neglect your retirement plan. You actually have to apply a lot of effort to ensure your plan will be successful. Here are some common mistakes to avoid.

• Not starting. No matter how challenging debt or other spending priorities seem, you have to save for retirement on a regular basis, even if it's only a small amount. Over time, those investments will grow into something considerably larger.

• Forgetting to link your work investments with your other portfolios. One of the critical problems in retirement planning comes from failing to coordinate your job-related investments with your other investment accounts. Working with a financial planner can help you look at every place you're putting your money and find out if you're implementing those assets in the right way.

• Not considering both kinds of IRAs. The biggest difference between a traditional IRA and a Roth IRA is the way Uncle Sam treats taxes on both types of IRA investments. If you put money in a traditional IRA, you'll be able to deduct that contribution on your income taxes. In a Roth, you don't receive the tax deduction for those contributions, but when it's time to take the money out, you won't have to pay taxes on it. If you and your spouse are not covered in workplace plans, you may be able to fund fully deductible IRAs. Talk to a tax professional or a financial planner about which options are best for you.

• Neglecting to plan and update your beneficiaries. Generally, there are limitations when you name beneficiaries in a company pension plan, but IRA's typically allow you to name any person, group, or entity to receive your assets. This provides you many opportunities to save income taxes, and protect your loved ones. However, even when you execute an effective plan, you need to update your beneficiaries as your life changes.

• Withdrawing money early from a retirement account or blowing a rollover. Money taken out of a retirement plan or IRA is subject to income taxes and a penalty if you are under 59 ½ years of age and do not put it back into an IRA within 60 days. When moving assets, most of the time a trustee-to-trustee transfer can be more efficient and have less margin for error. If the IRA distribution check is made payable to you, there is a greater chance you'll miss the 60-day deadline and you'll face taxes and penalties. With proper planning you can avoid all penalties, even before age 59 ½ if you work with an experienced financial planner.

• Failing to contribute the maximum. Not every employee can afford to contribute the maximum allowed by their respective work retirement plans or individual retirement investments, but it should be your goal.