Retirement is something that should be on everyone’s mind as soon as they accept their first job. The need and want to secure a viable plan to allow you to find freedom after a certain age should be imperative on everyone’s to-do lists. Whether you are looking forward to spending time with your children and grandchildren, plan on vacationing in an exotic land, or have plans to purchase your dream home to live out your older years, it is important to start planning for that early. In today’s economy, there are more and more people well past retirement age that have to work full-time jobs to make ends meet and that is something that, with a little planning, can be avoided.
One of the biggest regrets amongst those in their 50’s and 60’s was not making the financial choices they should have to be able to spend this time in leisure and retirement. You may think that retirement is not something that is on your mind daily in your 20’s and 30’s, but that’s the best time to start planning for retirement to assure that you will have the financial freedom you want when you reach retirement age. There are many things that you can be doing to prepare for retirement, but the even bigger concern is what choices you should avoid that could severely impact your retirement goals. Here are some of the biggest retirement mistakes you can make and how to easily avoid them.
Procrastinating or Saving Too Little
When you’re starting out in the workforce and trying to learn how to juggle bills, paychecks, and often student loans or even car title loans in Las Vegas, factoring in savings can seem a bit daunting. However, this time in your life is the perfect time to start saving. Technically you will need about 80% of your pre-retirement salary when you enter into retirement so putting aside as much as possible starting early can help you capitalize on interest and capital gains throughout the years. Remember that savings doesn’t mean to put a bunch of money into an account and wait, it means investing your money in a smart way that will help it earn interest throughout your pre-retirement years. Unless you have a nest egg already, saving 80% of your salary every year is an impossible feat so you want to make as much on your savings as possible.
In our busy everyday lives with family and bills, it’s hard to think about a time where you can put your feet up and relax, but that’s exactly what retirement should be about. If you take the time now and start saving, you won’t have to be scrambling down the line or work well into your 80’s instead of enjoying your retirement. Don’t procrastinate and make sure to consult a financial adviser for financial advice when deciding how much and where to invest your money, especially as your career and salary increase throughout the years.
Not Taking Full Advantage of Corporate Savings Plans
Savings plans like corporate 401K plans often have excellent incentives where you invest a certain percentage or amount, and the company will also invest in your retirement. Once the money is invested the company can’t take it back and even if you move jobs, you take your 401K plan with you. When you don’t maximize your investment in these savings plans you are ultimately saying “No thanks” when the company tries to hand you a check, which isn’t something you would normally do. Think of business matching plans as a bonus, and to receive that bonus all you have to do is lay down a plan to invest your money smartly and prepare for your future.
Many of the larger companies today have financial planners on site with their HR team that can help you understand the company’s policy on their retirement investment strategies. These planners can also assist you in deciding how much you can put into retirement without causing financial stress and worrying about payday loan qualifications in your current life. Remember, 401K’s are great savings plans, but they aren’t something that you want to keep withdrawing from or you will pay hefty penalties down the line. These types of savings programs are meant for you to invest and wait, not put money into it that you know you’ll need down the road.
Don’t Jump In Headfirst
Though I am actively preaching about jumping headfirst into retirement savings, you still need to plan for your retirement. You don’t want to change your life drastically so much that it doesn’t resemble your last forty or so years at all. Take time to think about who you are, what you enjoy, how you would feel about the amount of downtime in your plan and go from there. The worst thing you could do is own a business where you worked seven days a week for twenty years and then turn around and retire to a beach town in Florida. Sure the first couple of months will be great but once the excitement settles you’ll start to get bored and antsy because you have that doer personality, and that does not magically change at retirement.
Remember that retirement doesn’t have to mean a retirement community in Florida, though that may fit you perfectly. Retirement can also mean starting a new business you have always wanted or travelling around before picking one place to settle down in. Always think about who you are and take into account all the times you were stuck in your daily grind daydreaming about the possibilities out there if you weren’t stuck working the nine to five. You might be surprised what adventures you can come up with for your retirement that you never considered. Retirement means you have spent your time in the system, working hard, and saving, it doesn’t say that you are too old to enjoy life and do the things you’ve always wanted to but haven’t found the time to do.
Joseph Priebe is a graphic designer and photographer unleashed as a content marketer. When he’s not writing about loans or saving money, he’s scraping his pennies together for a 68 Camaro.