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The 10 Worst Money Moves for 2016

Complacency can derail even the best of intentions. For a 2016 that moves you closer to your retirement goals, you'll want to be on high alert for any of these ten complacency-ridden worst money moves.

1. Don't increase your savings

Save more? No. You want to spend all of that raise.

Has saving more ever hurt anyone? No, I didn't think so. It won't hurt you either. Viewing a raise or unexpected bonus as "extra" is not a bad idea — but saving some of it for a rainy day is an even better idea. For every raise or bonus you get, bank some of it. This habit will put you in solid financial shape within a few short years.

The worst thing you can do? Get complacent and spend more each year as your income goes up.

2. Disregard risk

Risk? It's all about where to get the best return on investment. Risk isn't a factor.

Pay down the mortgage? Take Social Security early? Too many people evaluate these decisions based on where they think they can get the highest return. There's a giant problem with this — return is not a certain thing.

Having no mortgage in retirement can reduce sequence risk (the risk of drawing money out in retirement in a declining market) and delaying the start of your Social Security can protect you against a retiree's number one stated risk — the risk of running out of money in old age.

The worst thing you can do? Continue making decisions without considering the full spectrum of risks you'll face in retirement and how your decisions may reduce — or increase — your exposure to those risks.

3. Ignore your career asset

Your career is good enough. You don't have time to invest in yourself.

A colleague of mine, Michael Haubrich, wrote a book called Career Asset Management that I wish I'd had when I graduated college. It teaches you how to get the greatest value from your largest asset — your human capital. It's never too late to start looking at your knowledge and experience as an asset. Continue to invest in that asset and it will likely be the best investment you'll ever make. Could you get a new certification, expand your leadership skills through specialized classes, or get another degree?

The worst thing you can do? Assume you are employable just the way you are and make no self-improvement efforts.

4. Wait until the last minute

A retirement income plan? Who needs that? Retirement is still years away.

Two of my favorite quotes from my favorite retirement income conference in 2015 were, "Retirement is an unforgiving endeavor" and "When you have safety nets, you worry less."

Who wouldn't want less worry? Worry reduction starts with planning and research has shown those who start planning at least five years before retirement have the highest levels of satisfaction in retirement. A solid plan also puts you in a strong situation should an unforeseen early retirement be forced upon you — and this is a common occurrence for many in their late 50s and early 60s.

The worst thing you can do? Wait until retirement shows up, often by surprise, and scramble to put a plan in place.

5. Don't solve for after-tax results

All dollars are equal, right? So make comparisons based on gross results — don't go to all the work of looking at things in after-tax dollars.

All dollars are most definitely not equal, and that is more apparent in retirement than at any other time in your life. Apply a simple rule like the 4% rule and you think you'll have $4,000 per $100,000 of capital to spend. But suppose one retiree has all capital in retirement accounts along with a pension, while the other has all capital in a brokerage account along with Social Security.

When viewed on an after-tax basis, the first retiree may only have $2,500 of that $4,000 available to spend, while the second may have all $4,000 available.

The worst thing you can do? Ignore taxes and the impact they will have on your retirement income.

6. Apply one-size-fits-all advice

Single, married, over 66, under 55, male, female, what difference does it make? Good advice is good for everyone, isn't it?

Financial advice is not a one-size fits-all proposition . Singles face different risks than married couples. Women face different risks than men. Those who will reach 66 earlier in the 2016 year will have different Social Security choices to make than those who are younger. Those still saving should invest differently than those who are near retirement.

Sure, some advice is universal, such as saving more, which is pretty much good for anyone, but numerous other decision points, such as investing, when to take Social Security, and which risks are most likely to affect you, vary by demographics.

The worst thing you can do? Follow generic advice without considering your own demographics and life stage and how the advice should change based on those things.

7. Don't push the limits

Contribution limits to 401(k)s and IRAs in 2016 remain the same as 2015, so you don't need to do anything differently, do you?

It's true the 2016 maximum contribution limits to most retirement plans remain the same as they were in 2015. But some lesser known limits have changed. For example, the maximum amount of income you can have and still contribute to a Roth IRA increased slightly.

Whatever the limits may be, are you pushing them? What's the worst thing that could happen by max funding a Roth IRA, or increasing your emergency fund to seven months of living expenses instead of six? Heck, if you get to the end of the year and don't like having more money saved, you can change your mind and spend it.

The worst thing you can do? Never revise your savings habits based on changing limits. Just assume what worked last year will work the same way this year.

8. Measure nothing

It's too much work to track monthly spending, or update your net worth statement. What good would it do anyway?

A few people can diet without a scale, but most need a measuring process to see how they are progressing. Finances are no different.

Simple systems are best. For example, try tracking total dollars out of the bank account each month by recording the numbers from your bank statement in a spreadsheet. Or track total monthly or annual contributions to all savings and retirement accounts.

You'll be amazed at how a simple monitoring system raises your level of awareness and has an automatic effect on your spending and savings behavior.

The worst thing you can do? Measure no personal financial statistics and hope for the best.

9. Trade often and impulsively

You have to watch your money every day, and if the market is going down, you have to do something right?

Research shows frequent trading is often linked to overconfidence and delivers inferior results when compared to those one might get by using a calmer approach focused on long-term outcomes. Despite such research, impulsive investing behavior continues and retirement nest eggs are not as large as they could be because of it.

For the new year, put together a 10-year plan and give up the trading. Focus on diversification and think about results over decades, not days. The 70- or 80-year-old you will thank you.

The worst thing you can do? Get caught up in trends and media frenzies and trade each time scary news comes out.

10. Base trust on personality

He or she is so friendly, nice and part of a social group you know. Of course you trust them.

There are specific tactics that con artists use to pull off scams. Social proof is one of them — if other people like and accept someone and are investing with them it must be ok, right?

According to the Center for Retirement Research Squared Away blog post, The Psychology of Fraud , experts predict that the incidence of fraud against the elderly will continue to increase in coming years. As you age, you naturally experience cognitive decline and your ability to weed out the "too good to be true" offers won't be as good as it used to be. Best to pick advisors you trust based on experience and credentials — and do it early on in retirement, not later.

The worst thing you can do? Be too trusting later in life and risk your life savings on someone's idea because they seem so nice.

Recognize yourself in any of these 10 behaviors? If so, get your 2016 off to a good start and decide what are you going to do about it.