Throughout life there are many financial pitfalls and mistakes to be made that could negatively impact your savings and your retirement fund, avoiding some of the mistakes now could save you some serious financial headaches later on life.? For example, some of the common pitfalls include:
Spending Your Retirement Savings To Bankroll Your Children
Children are some of the single most wonderful blessings a person can have during his or her lifetime, but can also be one of the most significant financial drains on your retirement savings.? Often times as parents it can be difficult to prioritize your own future and you may push off your own retirement savings for little Bobby or Suzzie who needs thousands of dollars every year to pursue dance, or karate, a new car, college, not to mention the $30,000 wedding they?ve always wanted.? These are all wonderful things, and as parents we desire our children to have the best, but it should not come at the expense of your own retirement planning and savings.? Bobby and Suzzie may not care as much about dance and karate as adults, when their own parents have become their financial dependents due to inadequate retirement savings.
Single Currency Homes Often Are Behind In Retirement Savings
According to statistics 1 out of 4 single income homes are well behind where they need to be in saving for retirement, vs. 17% of dual income homes.? This could be a simple factor of more households are choosing to have both husband and wife work causing the standard of living bar to be set a little higher, or it could be due to inflation and a struggling economy making it nearly impossible for single income home to get by. Regardless of the reason, your retirement portfolio will be easier to manage if both members of the family contribute to the family income.
?Paying Off Debt Instead Of Saving For Retirement
Often times people make the mistake of paying off their school loans, car payments, or dream home mortgage before they even begin to salt away money for retirement.? While it is important to be debt free, if you avoid all savings for retirement you often miss out on many years of compounding interest by not starting to save young.
Not Calculating How Much You will Need To Save For Retirement
Many couples have no idea how much they will need to save for retirement in order to maintain their pre-retirement lifestyles.? If you have a healthy pension plan on average you will need to plan for 60-80% of your preretirement income to be able to live at a desirable standard of living in retirement.? Also, you need to save enough for at least 25-40 years of retirement.? You want your retirement savings to outlive you, not the other way around.
Choosing Inappropriate Investments For Your Age And Risk Appetite Can Sabotage Your Retirement
The younger you are when you begin saving the more risks you will be able to take in your investments.? As you age you will need to reduce your risk exposure and make sure that you do not put all your eggs in one basket.? This will ensure that your retirement money will be at your disposal when you most need it.
Retirement savings can be really tricky, especially in an economy where no investment appears ?safe? and very few are generating the desired profit many would hope for.? For more information on retirement planning and on retirement designated investments visit theannuityupdate.com?
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Source: http://themoneyupdate.com/how-to-avoid-sabotaging-your-retirement/
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