Whether you’re just starting out in your first job, rejoining the work force or at the peak of your career, planning for your financial future should be a priority. It’s never too soon – or too late – to put money away for retirement.

This is especially true for women. We live longer, and we tend to put our families first, so we need to budget for the long haul. That’s why it’s critical to understand what retirement will cost you in real dollar terms and how to avoid some common mistakes that can derail your plans.

1) Not calculating how much you’ll need in the long term.

Unfortunately, there are plenty of people out there who have no idea how much to save or how much they’ll need per month or annually to live as comfortably as they’d like to in retirement. According to a 2014 survey from the Employee Benefit Research Institute, about 56% of Americans haven’t even tried to figure it out. Some online retirement calculators can give you a better idea of what you’ll need based on how much you’ve already saved and how much more you plan to put away. Sitting down with a financial adviser is also a good idea.  Together you can create – and stick to – a savings plan going forward.  

2) Underestimating the cost of health care and long-term care.

You may be healthy and in great shape right now, but as you age there are no guarantees. The only certainty is that the cost of health care and long-term care will continue to rise, and most of us aren’t sure we’ll be able to cover them. In fact, as of 2014, the average couple in the U.S. can count on spending more than $200,000 on health care throughout their retirement. But the sticker shock isn’t limited to health care expenses. In 2013, the average cost of a private room in a nursing home was more than $94,000 per year, while moving into an assisted living facility would set you back about $41,000 annually. In other words, remember to factor in the price of health care when you’re running the retirement numbers.

3) Taking Social Security too early.

This is a mistake lots of us make, but one that’s easily avoided. If you start collecting Social Security before full retirement age, you’ll get less. So, for example, if you were born after 1960, full retirement age is 67 (see the Social Security calculator to determine your full retirement age), but you can start collecting benefits a few years earlier at 62. If you decide to start tapping into your Social Security at 62, you’ll only get 70% of the monthly benefit; at age 65, you’ll get 86.7%. If you wait to start collecting at 67, you will receive everything you’re owed. How much you receive depends on how much you’ve earned throughout your working lifetime and when you started collecting.

4) Paying too much in retirement plan fees.

Fees can nibble away at your savings, so read your statement and know what you’re paying.

5) Not diversifying or rebalancing your portfolio.

Experience has taught us not to put all our eggs into one basket. In the case of your portfolio, that means diversifying or spreading your investments across asset classes, sectors, even countries. But it’s also important to know how much risk you’re willing to put up with and to rebalance accordingly. Someone in their 20s has a longer time horizon and might invest more aggressively, while someone in their 50s may decide to avoid the risk by sticking to a more conservative path. Either way, you’ll want to rebalance periodically to ensure that your portfolio’s asset allocation is following your plan.

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