Retirement should be a time to enjoy the money and savings you’ve worked hard to build. But a few financial decisions made along the way can affect how soon you retire, how comfortably you live, and how long your savings will last.
Many retirement mistakes don’t seem like a big deal at first. Delaying contributions, ignoring workplace benefits, or failing to plan for future expenses can slowly put you behind and leave you with fewer choices later in life.
Waiting Too Long to Start Saving
Delaying retirement savings can cost you more than you might expect, especially early in your career. Starting sooner gives your money more time to grow and allows you to build a retirement fund through smaller, regular contributions.
Missing Out on Employer Contributions
If your employer offers a retirement plan with matching contributions, not contributing enough to get the full match means missing out on money that could have gone toward your future. Check your plan’s requirements and contribute enough to receive the full match, if your budget allows.
Spending Without a Long-Term Plan
Vacations, restaurant meals, shopping, and everyday expenses can take up much of your income before you realize how little is left for retirement. Setting aside money for retirement as part of your monthly budget can help you enjoy life now without putting all your future plans on hold.
Underestimating Healthcare Costs
Medical expenses can take up a large part of your retirement budget, especially as you get older and need more frequent care. Remember to account for insurance premiums, prescriptions, out-of-pocket costs, and possible long-term care when estimating how much money you’ll need.
Failing to Review Your Investments
The investment choices that worked well early in your career may need to change as you near retirement. Review your savings, investment mix, risk level, and retirement goals from time to time so you can adjust if your plans or financial needs change.
Related: 12 Hidden Challenges of Retirement Most People Never See Coming
Relying Too Heavily on One Source of Retirement Income
Relying entirely on Social Security, a pension, or another single income source can leave you in a difficult position if payments fall short or your expenses rise. Having personal savings, investments, retirement benefits, and other income sources can give you more options and reduce the pressure on any one source to cover your living costs.
