Navigating the retirement planning waters can be tricky, especially with advice coming from all directions.
However, there are a few basic mistakes one should try to avoid when saving money for retirement.
- Lack of Diversification – Keep investments diversified to spread risk. Going all in on one investment opportunity can potentially lead to a huge loss. Keep in mind the old adage: don’t put all your eggs in one basket. If one investment goes south, there are others to keep money flowing in.
- Missing Educational Opportunities – Not taking the opportunity to further education or training to help advance in a career and potentially expanding earnings is a mistake. The training or education might take money now, but will more than pay for itself down the road. Increasing one’s salary is increasing savings potential.
- Poor Time Management – Forgetting about time management could potentially hurt retirement savings. In the beginning stages of retirement savings, when there are many years to save, it is acceptable to take risks with investments, and can even be highly beneficial. However, when retirement draws nearer, it is best to take a more conservative approach, so one does not lose money right before it is needed.
- Pulling Funds – Taking money out of retirement accounts and funds early is generally not a good plan. Doing this can cause penalties and be regrettable down the line. Keep retirement savings as a priority throughout other financial decisions, such as buying a home. While it seems attractive at the moment, it could really cause issues closer to retirement.
- Lack of Planning – The biggest mistake of all is not planning for the future at all. Mountain West IRA can help find a retirement plan to get on the right track for retirement saving.