4 Common Retirement Mistakes
Another year, another step closer to retirement. Some of us may be closer than others, but it’s an eventuality that we all have to face. If it’s something we all know we have to plan for, why does it cause so much stress and anxiety?
Retirement is all about enjoying your life and doing things you haven’t had the time to do. Yet most of us are worried about outliving our money or that we haven’t saved enough.
In order to make the best of 2015, Lincoln Savings Bank has outlined four of the most common mistakes we see when it comes to retirement. Are you making any of these errors?
Waiting- most people wait for a couple of reasons. First, retirement seems like such a distant goal, they feel they can put it off. Second, they feel like they don’t make enough money to contribute to retirement. But you don’t need to contribute a lot of money every month if you start early enough. By saving $100 a month now, you allow compound interest to work its magic for a longer period of time. One hundred dollars a month for 40 years at a seven percent growth rate comes out to about $377,000 for your retirement.
Not having a goal- it’s very hard to hit something when you’re not aiming at anything. Just like you have career goals, sales goals and personal goals, you need to have retirement goals, too. A specific dollar amount or range is a good start. This allows you to break down your overall goal into monthly, yearly and decade goals.
Not automating contributions- automating retirement contributions to a 401(k) or IRA takes out the human decision. We love money, and parting with it is hard for most of us. By letting technology take over this part of your finances, you don’t have to make a tough decision every time you want to contribute to your retirement.
Not taking advantage of “free money”- if your employer offers matching contribution on a 401(k) or other retirement plan, you are throwing away “free money.” Be sure to take advantage of any employer matches for retirement accounts if they are offered.
Planning and saving for retirement is something we have to participate in our entire adult lives. Waiting, not having a goal, not automating our retirement savings and failing to take advantage of contribution matching means being able to enjoy our retirement less. Which of these mistakes can you change to get on track for your retirement in 2015?
If you need assistance with planning for your retirement, Lincoln Savings Bank offers financial planning services to help you identify your goals, what you need to retire and how to reach those milestones. Get in touch with us today to learn more.
Lincoln Savings Bank, member FDIC