Retirement Savings Mistakes
It’s an old saying that we can all learn from our past mistakes; but when it comes to your retirement savings, you can’t afford to make any! From not taking advantage of 401(k) employer contributions to investing too much into one company stock (Enron, anyone?), here are some of the worst retirement planning mistakes that anyone can make – so take these lessons to heart without bearing the consequences!
Avoiding 401(k) retirement funds altogether. Sure, you may think that your company’s 401(k) plan is less than desirable. However, there are very few employer retirement plans out there that should give anyone a reason to turn and run. If your employer has a 401(k) retirement plan, sign up for it – no excuses!
Not Taking Advantage Of Company Matches. We’ve seen too many cases of employees who only contributed half of their 401(k) maximum and missed out on their company’s full match; it’s like turning your nose up at free money! Always contribute the maximum amount to your 401(k) to receive your employer’s full match.
Not Striking The Right Balance Of Risk. Safe investments are the key to a successful retirement fund – if you take too little risks or invest all of your 401(k) into one company, you risk either not making enough money or losing it all if the company stock performs poorly. Make sure that you have up to 60% of your investments in stock, with the rest in safe investments like CDs, bonds, TIPS, etc.
Cashing Out Your 401(k). If you’re a baby boomer, then you know better than to cash out your retirement savings; but what if you’re younger? It may seem awfully tempting to simply turn your old job’s 401(k) into cash once you leave, but resist the temptation to do so – you could lose out on serious sums of money by not putting that money straight back into savings and investments. You may have years yet to save, but if you want to retire a millionaire, you need to have discipline.
For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!
Authored By Kenneth Himmler, Sr.
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