Some days it can seem like your retirement is a far-fetched fantasy that you will never see. However, this does not mean you shouldn't know your options and begin planning for that day.
Unfortunately, researching the options of retirement can be confusing, which can lead to unrealistic planning of your future. In fact, according to the Federal Reserve, one in five people who are near the average retirement age have ZERO money saved. Also included in the study conducted by the Federal Reserve: 41 percent of people between the ages of 18-29 said they have never thought about retirement.
Not saving enough money is one of the biggest retirement mistakes you can make.
Why does it seem people aren't concerned with their retirement planning?
It may seem foolish to not save money for your retirement, but not many people have that option. If you're stuck at a job earning low wages, or can only work part-time, your current paychecks could be going to things necessary in order to survive (food, rent, bills, etc.). Thinking about retirement might not even be an option. But, you could put away a very small amount every time a paycheck comes so you have at least a little bit of money saved.
What are some other retirement mistakes?
Another retirement mistake many people make is assuming that you have control over when you will retire. You may have this idea in your head that you are going to retire at a specific age. However, what if an unexpected illness occurs where you need to quit your job? What if there is a major downsize at the company where you work? The truth is, you never really know what to expect at any job (and life), so it's always important to start saving any amount of money at an early age.
The eight BIGGEST retirement mistakes:
- Not saving enough
- Assuming you have control over when you will retire
- Ignoring tax impact
- Unexpected medical costs
- Failing to lock up lifetime income
- Retiring too soon
- Drawing down retirement savings too rapidly
- Underestimating longevity
Journalist and finance author, Dan Kadlec, joins Melanie Cole, MS, to discuss the biggest retirement mistakes and what you can do to prevent them.
Daniel J. Kadlec is an author and journalist whose work appears in TIME and MONEY magazines and on their websites, among other outlets.