5 retirement mistakes you are likely making

The only certainty in retirement planning is that you'll never get it exactly right. You can't know how long you'll live or how your lifestyle or expenses will change, so the best you can do is estimate. That said, some estimates are more accurate than others. Here are five mistakes that could seriously throw off your retirement plan, along with what you can do to avoid them.

1. You're winging it.

It's tempting to look for an arbitrary measure of how much to save for retirement, like $1 million or 10% of your income. But these figures can't account for your unique lifestyle and retirement goals. If you want a truly accurate number for how much retirement savings you need, you need to do personalized calculations.

The first step is to estimate how long you're going to live and subtract your planned retirement date to figure out how many years your retirement will last.

Next, figure out your estimated annual retirement expenses by adding up the costs of your utility bills, housing costs, insurance, groceries, and other expected expenses. Keep in mind some expenses you have now will disappear in retirement, like childcare, while others, like healthcare, will rise. Once you've got your annual living expenses, multiply this by the number of years of your planned retirement, adding 3% annually for inflation. A retirement calculator can do this math for you.

Lastly, now that you have your total estimated retirement expenses, subtract all the retirement income you expect to receive from other sources, like Social Security or a pension. Create a my Social Security account and log on to see how much you can expect in Social Security benefits based on your current work record. The remainder after subtracting your income sources in retirement is the target number for how much to save on your own for retirement. Your retirement calculator should give you an estimate of how much to save each month now to meet your goals. If you get an employer match in your 401(k), you can subtract that from your monthly savings target, to find the amount of your own money you should set aside each month.

2. You're underestimating the length of your retirement.

To young working adults today, living until their mid-80s may seem like a good, long life. While the current average life expectancy in the U.S. is 78.6, this is an underestimate for many. One in three 65-year-olds today can expect to live past 90, and one in seven can expect to live past 95, according to the Social Security Administration. If you only set aside enough money to cover retirement expenses through your mid-80s but you live into your 90s, you could be scrambling to come up with five to 10 extra years of retirement income, or relying on your children or other loved ones to support you.

There is no obvious way to choose the right life expectancy. You can base your decision on statistics or your family history, but there's no way to know if these will hold true for you since you can't predict the future. The best you can do is aim high -- just to be safe. This is especially important for women who tend to live longer than men. If you're a reasonably healthy person, optimistically plan to live to at least 90.

3. You forgot about inflation.

To keep up with rising prices, you need to factor in an inflation rate of 3% per year when calculating your retirement expenses. This is the average annual inflation rate based on historical data, though the actual inflation rate in a given year may be lower or higher.

You don't want to forget about inflation, because it plays an important role in determining your cost of living. You may be able to get by on $35,000 this year, but those same living expenses will run you $36,050 the following year, simply because the cost of goods and services rises, in this case by 3%. Fortunately, most retirement calculators account for inflation, so you don't need to worry about doing the math.

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4. You forgot about healthcare.

You may expect Medicare to cover your healthcare expenses in retirement, but it doesn't cover everything. If you need dental work, long-term care, or a hearing aid, you'll pay out of pocket unless you have supplemental health insurance. Like most health insurance policies, Medicare also has monthly premiums, deductibles you must meet, and copays for services. So it's erroneous to assume you won't incur any healthcare costs once you retire.

In fact, the average 65-year-old couple retiring this year will spend about $285,000 on healthcare according to Fidelity, and other projections say retirement healthcare expenses could easily climb higher than $300,000.

If you haven't already, build these costs into your retirement plan using the $285,000 figure as a baseline. Divide this by the number of years of your retirement to get an annual healthcare cost estimate. Then add this in when you're calculating your retirement living expenses and adjust your retirement savings plan accordingly.

5. You make your retirement plan and never look at it again.

Retirement planning isn't a one-and-done thing. You should reevaluate your plan every year or two to ensure it's still suitable for your needs. As your income rises, increase your retirement contributions, and make adjustments if you realize your savings aren't on track for the retirement you want. This may mean delaying retirement or changing your investment allocation. It's easier to make small changes now than more drastic changes in retirement.

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