Retirement is one of those things that many of us look forward to for years to come. It can be one of the happiest times of your life, and one that allows you to enjoy all of the things that you didn’t get to enjoy while you were focused on your career and family. However, retirement can be incredibly stressful if you’re not prepared for it.
Without a steady income coming in, it could be disastrous. In order to make sure that you enjoy your retirement, it’s critical that you prepare. One of the best ways to do that is to identify some of the most common mistakes, and how to avoid them. If you want to steer clear of retirement woes, here are the biggest retirement mistakes you should avoid at all costs.
Not Putting Money in the Right Kind of Account
Putting money away in any kind of account is a great start for preparing for your retirement. However, not all accounts are built the same. It’s important that you put money away in the right type of account that will grow as much as possible. The term “savings account” can be deceiving, for example.
While it may seem like the best place to put away your retirement funds, the truth is that it’s not. Savings accounts have relatively small interest percentages, and as such, will not give you the highest possible return on your investments.
You should consider talking with a financial advisor about the best types of accounts for retirement, like a Roth IRA. They’ll be able to help guide you on a diversified portfolio with a reasonable amount of risk.
Starting Over 50
In our younger years, we may think that retirement is millions of years away. After all, for our younger selves, it practically is. However, the later you start saving for retirement, the less time you have for your money to grow. One of the biggest mistakes people make is failing to get started as early as possible.
The sooner you can start putting money away, the more that your money will grow, and the more you will benefit from it later in your life. As they say, the early bird gets the early worm. If you can manage to start saving as early as your 20s, the better off you’ll be once it’s time to retire.
Not Paying Off Debts
One of the worst mistakes you can make going into retirement it’s failing to pay off your debts. The more debts you have at retirement age, the harder it will be to live a comfortable lifestyle. Before you retire, try to aggressively pay off anything that you owe. This may require you to cut back on your expenses significantly until everything is paid off, but when it is, you will thank yourself for it.
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