Do you want to retire comfortably? Of course you do.
However it’s a sad fact that many people reach retirement age without enough money to live comfortably and do all the things that they dreamed of in their retirement.
If you want to retire comfortably, then you should take note of the things below and refrain from doing them to avoid sabotaging your retirement.
5 Ways You’re Sabotaging Your Retirement
1. Not planning for your retirement
One of the most common ways people sabotage their retirement is by not planning for it. Even if you think that you’re too young, you still need to plan for your retirement as soon as you can. Determine when are you going to retire and stop working, how much will you need to sustain your retirement needs, where do you want to live, etc.
Once you can answer those, you can now start planning for your retirement. You’re also one step closer from achieving your dream retirement, not one step behind.
2. Not saving early
Again, just like in planning your retirement, you need to start saving for it as early as possible too. Putting off retirement saving can leave you coming up short. The earlier you start saving, the longer your savings has the chance to flourish.
For example, let’s say you start putting $500 a month beginning at age 25. By the time that you’re 65 years of age, you can have as much as $720,000, assuming an annual return of 5 percent. Waiting until you’re age 40 until you start saving for your retirement can cut your retirement savings to just $288,000. Not even half of what you could have save if you started saving earlier at age 25.
Calculate how much you could save in a set amount of time with the help of this Compound Interest Calculator by Investor.gov
3. Borrowing from your account
The main purpose of having a retirement account is for you to have enough money when you decide to call it quits at work. So if you’re going to borrow from your retirement account, you won’t be able to build your nest egg as much as you can. Even if you promise to replace the amount that you borrowed with interest, you still cannot replace the time that has been lost. There’s no way you can earn back the compound interest that you could have earned if you haven’t borrowed from your account.
A good way to avoid that from happening is to just leave your retirement account alone.
4. Trading too often
You should be a long-term investor, not a trader. Trading often increases the chances of you buying high and selling low. Also, trading frequently means you’re paying more fees, and that’s not good when you’re building up your nest egg.
Don’t panic. The market always find its way up, and history has proven that from time to time.
5. Spending too much on other people
Spouses, children, close friends, and even pets, they shouldn’t be spoiled with your money. So stop giving them money every time they ask you for it. Other people have to learn how to take care of themselves. You’re not going to live forever, so you should teach your children how they can support their needs and wants on their own.
You deserve to retire comfortably because you work hard to make it happen. Don’t let them take you for granted.
Everyone of us has the chance to retire comfortably. However, wanting to retire comfortably and being able to achieve it are two different things. If you find yourself doing at least one of those things above, then you could be sabotaging your dream retirement, and maybe it’s a good time to correct your mistake/s today.
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