5 Biggest Threats to Your Retirement
Author: Deb / Date: August 8, 2023 / Tags: how-to
(MoneyHippo.com) – One day in the near or far future, you’re probably going to come to a point in your career when it’s time to leave your job and enjoy your golden years without strings. Unfortunately, not everyone plans that far ahead. Unfortunately, a few get stuck in pitfalls, leaving them in a tight spot when retirement time comes. Knowing what these snags are is the best way to navigate around them. While there may be other hazards, look out for these detours on your road to preparing for retirement.
- Missing 401(k) Opportunities: Sometimes, people have jobs where their employer offers a 401(k) match employee contributions, but they don’t take advantage of the perk. If you have this benefit, be sure to contribute up to the amount your employer will match, and you’ll grow your retirement twice as fast.
- Cashing Out 401(k) Account: Speaking of retirement savings, never take a 401(k) withdrawal when you leave a job because you’ll suffer taxes and penalties, in addition to losing those savings for the future. Instead, roll it over to a 401(k) at your new job or into an IRA and let it continue to grow.
- Saving too Little: Perhaps the most important pitfall is not saving for retirement at all or saving too little. Talk to a financial advisor to estimate how much you might need during retirement per year and what you have to save from now until then to get you there. Remember, it’s never too late to start.
- Extraordinary Expenses: As you get older, you might experience medical or long-term care expenses that can quickly eat into your retirement funds. When considering investing for the future, consider saving for these expenses by looking into a health savings account (HSA) and long-term care insurance.
- Dipping Into Retirement Funds: The biggest thing to remember is never to touch your retirement savings. It may be tempting to withdraw but resist. Once you set the ball rolling on retirement wealth accumulation, let it increase to its potential.
Everybody has to navigate their way to retirement savings through their own personal obstacle course, but knowing where others have hit the deepest potholes might help you avoid trouble. Here’s wishing you a successful retirement planning road rally!
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