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Avoid financial pitfalls in retirement

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Saving for retirement is only part of the battle, U.S. News and World Report warns. While Americans may spend years of their lives planning and saving for a future full of traveling and sitting by the beach, if they do not also account for financial land mines they could be in trouble.

Inflation is one of the most commonly overlooked and potentially devastating issues retirees are faced with, the Boston Globe reports. Individuals who have a financial plan in place that allows for 3 percent inflation a year may think they will be covered, but experts warn that if that rate rises just one point, they could run out of money much sooner than expected.

Inflation can reduce the impact of annuity investments and universal life insurance payments, further hurting a person's financial portfolio. Taxes can also be a potential saboteur to retirement savings, according to U.S. News. Many investments will need to be taxed upon withdrawal, taking away from the overall capital one believes they have.

Another often underestimated tool that people can use, is to keep saving, even if it is a small amount, the news source reports. Falling behind is not reason enough for someone to abandon a financial savings plan. 

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