Are You Sabotaging Your Retirement?

Are You Sabotaging Your Retirement?

Are You Sabotaging Your Retirement?We all dream of that day in our future when we?ll officially leave the workforce to enjoy an endless amount of free time.

You might envision yourself moving to someplace warmer, finally getting around to every hobby you wanted to pick up, golfing, vacationing, getting through your to-read list, or simply enjoying the fact that you can do whatever you want with your day.

Like most employees you probably put away a portion of your paycheck towards your 401(k) or other retirement fund. However, like many others, you likely do that and only that, and your retirement fund is something that?s simply out of sight and out of mind.

If that?s the case for you, you could be sabotaging your retirement without even realizing it. Here are three ways you could be doing just that.?

1. Not Saving Enough

When it comes to your retirement, the more money you put in now, the more you?ll have in the long-run. That being the case, whether you?re saving only a small portion or not saving at all because you don?t think you can afford it, not saving enough is one surefire way to sabotage your retirement fund.

No matter what, start putting away as much as you can as soon as you?re eligible to participate in a retirement plan. Begin with at least 2-3% and work your way up one percentage at a time when you can afford it.

If you don’t have access to a 401(k) through your employer, you can start investing for retirement with an online broker like Ally Invest.

Ally Invest has an industry-low price of $4.95 per stock trade and has numerous free tools to help you start saving for retirement.

2. Failing to Factor in All of Your Needs

Thinking about your end goal now might seem like a lot, but come actual retirement, it might not be as much as you think. The worst thing you can do is underestimate how much income you?ll actually need.

Think about all of your needs and what kind of lifestyle you hope to have in retirement, then create a solid plan to save for those needs.

By doing so, you?ll ensure your comfort and keep yourself from having to worry about finances or re-enter the workforce as you?re trying to enjoy the rest of your life.

3. Borrowing from Your Savings

The basic principle behind a retirement fund is putting money aside in order for it to build up over time. Start borrowing from that fund or taking out small loans, however, and you?ll lose valuable time and money.

No matter if you pay that loan back, you?ll still miss out on interest you?d otherwise have accrued. Be sure you?re also putting other savings away to use when you really need it. You?ll have money to fall back on in a crisis and keep your retirement fund untouched.

In the moment, taking money out of your paycheck for retirement can seem painful. Moreover, depending on your paycheck, it can seem downright impossible.

Nonetheless, no matter your financial situation, you should do your best to add to that 401(k). And when you do, be sure to plan out and accommodate all of your needs, save as much as you can, and leave that money right where you put it. Come your time to relax from the workforce, you won?t have to worry about money.


At what age did you start saving for retirement? What portion of your paycheck do you put away currently?


Photo courtesy of: paulbr75

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