The Worst Retirement Saving Mistakes You Can Make
Saving for retirement is a crucial part of life that many people seem to neglect. According to recent studies, the majority of Americans who are nearing retirement have only saved up 12 percent of what they will need. That simply will not cut it, and collectively as a nation, we need to start thinking about our retirement more seriously. That is why this list is here to help you avoid the biggest pitfalls that most people face when it comes to saving for retirement.
Lack of a Plan
Simply put, most people just aren’t making a plan and it is killing their retirement. Without a plan, you are likely to only occasionally put aside money for retirement, and there may come periods of time where you forget about it entirely for several months before beginning to casually save again. Following a routine like this is exactly how you end up being close to retirement with only 12 percent of your total goal saved.
Not taking the time to sit down and come up with a plan also tends to lead to not even having any financial milestones in mind. Saving for the sake of saving is fine if that is what works for you, however, saving towards a set goal is much easier to maintain. It gives the person a sense of achievement and progress as they slowly climb to reach that magical retirement number.
Ignoring Special Accounts
In theory, it might seem like it is unimportant how you save the money or what account you put it in, just as long as you are saving some. This could not be further from the truth because if you are not taking advantage of special retirement accounts like IRA’s and 401k’s, then you are essentially throwing away free money. These special accounts allow you to contribute money into them for retirement savings and they either provide you with tax benefits now or in retirement. Either way, it is likely that these accounts could end up saving you thousands of dollars.
Relying on Social Security
The money collected from social security, while definitely beneficial, is not enough to support your retirement financial needs in the vast majority of cases. While you can expect to receive an average of about $1,400 per month from social security, this does not match up with your spending in most cases. So do not just save a few thousand dollars and expect that social security will cover the rest, because the harsh reality is that it will not.
Misjudging Healthcare Costs
It is unavoidable that later in life there will be a spike in healthcare costs for you and your significant other. Even if you are both incredibly healthy and in your 40’s right now, that does not mean something can’t develop later on in life which is costly to treat. That is why it is always better to bet against your body and increase your retirement savings goal to account for an increase in healthcare costs.
Even knowing these pitfalls doesn’t automatically make saving for retirement easy. That’s why many people decide to get a financial professional to help them set themselves up for a successful and stress-free retirement. Contact our team at Secure Choice to get a full-time financial professional on your side who will get your money to work for you.
