As we celebrate Women’s History month and women and investing in particular let us look at investment pitfalls to avoid.

Mistake #1: Failing to plan for longer life expectancies. We’re living longer and longer and of course we know women live longer than men; and for that reason it is especially important to use investment strategies that balance a sustainable withdrawal rate with the right measure of risk and that take inflation into consideration. Balancing all these factors is critical to helping ensure you don’t run out of money before you run out of life.

Mistake #2: Failing to plan for health care expenses. According to the Center for Retirement Research, retirees can expect to spend 29% of their annual income on health care by 2020. The annual cost of a private room in a nursing home is nearly $75,000 a year, $38,000 a year for assisted living. It’s critical to include health care planning in your long-term financial plan.

Mistake #3: Making emotional investment decisions. A 2011 study by benefits company Aon Hewitt shows that baby boomers are especially at risk of making emotional investment decisions. Study results show that those nearing retirement become more averse to risk, and are prone to bailing on the market during declines. The key there, identify the proper risk and make sure that your portfolio matches your desires so you don’t make emotional decisions.

Mistake #4: Not considering seeking professional advice. In a study conducted at Yale and Princeton, psychologists gave undergraduate students questionnaires asking how they compare with their classmates in a variety of skills and tasks. For example, are you a more skillful athlete than your average classmate? The overwhelming majority of students responded that they are above average athletes, drivers, dancers, students, etc… Obviously not all of them can be above average, but their self-perception led them to believe it was so. When retirees were asked for their number one piece of advice they would give to a 30 year old or to themselves when they were 30, 34% recommended working with a financial advisor or working with one earlier in life.

Those are our 4 investment pitfalls to avoid. I have a white paper I have published, “Women and Investing: A Financial Guidebook for Women” if you’d like a copy of that, click on the banner on the right that says “Women & Investing” and you can download your free white paper.