When it comes to retiring, we do whatever we can to invest our time, effort, and money into a long-term retirement plan. Planning ahead, saving frequently, and making good decisions about our money will often lead to a secure retirement. However, the best plans can often go astray by falling into a few seemingly benign traps.
Here are 4 common mistakes that you should avoid if you don’t want to jeopardize your retirement:
Retiring Too Early – You can definitely retire earlier than normal; however, there are still some dangers when doing so. By retiring early, you may not give your interest time to compound on all your retirement investments, and you could run out of money early. Make sure you talk to a financial planner before you make the move to retire early on in life.
Living Beyond Your Means – This mistake, which many make, can throw a big wrench into your retirement planning. You can easily avoid this, however, by formulating a basic household budget and sticking to it. Determine how much money you will actually need for food, travel, fun, healthcare, rent or mortgage, transportation, and other necessities every month. Feel free to review and revise your budget every so often, but more than anything, remember to stick to your budget, even once you’re retired.
Going Into Debt – You may do everything right when it comes to planning out your retirement including putting money into your IRA or 401(k) and budgeting, but you can still make one huge mistake – allowing your credit card debt to accumulate. It is incredibly unwise to enter into retirement with debt on your shoulders; in fact, advisors will, in many cases, tell you to place your attention into paying off your debts than saving for retirement. Do yourself and your retired future self a favor – pay off your debts as soon as possible.
Not Starting Early Enough – All too many people wait too long to start saving money back for retirement. You don’t have to wait until you’re a certain age or at a certain point in your life to start investing. Just saving a small amount consistently early on can make a big difference, so start now!
When you’re starting to make your budget or your retirement plans, don’t forget to think about insurance. Chat with your agent here at Madison Mutual by calling 1-800-766-MMIC or you can find more money tips on our website at www.madisonmutual.com!