Retirement is something that everyone needs to prepare for, no matter which way you cut it. You may be just in your early 20s or you’re in your 40s looking at early retirement or you’re just a couple of years away from it. Regardless of where you are now, life will lead you there sooner or later.
Accepting this fact and embracing this reality can help you renew your mindset about it and make your plan and prepare for it. After all, a successful retirement is not just about how financially well-off you are but on how you carefully plan for it and avoid big mistakes that could make retirement miserable for you.
6 Money Mistakes that Will Destroy Your Retirement
Avoid these blunders at all costs if you want to enjoy your retirement and live the rest of your life to the full.
1. Not having built an emergency fund
Even if we’re not talking about retirement, an emergency fund is one of the top priorities that any responsible man and woman should have. Life is filled with uncertainties and unexpected situations. You wouldn’t want to be caught off-guard in an emergency with zero funds. And you can’t expect to continue living like that during your retirement.
That can be quite stressful if you don’t have funds to dip from when you need money for air vent cleaning or a simple car repair. Avoid stress and build your emergency fund now.
2. Waiting too long to invest
There’s no such thing as not having enough money to invest, especially in today’s time. A lot of micro-investing apps allow you to invest even the change in your pocket and earn from it. You have apps like Stash and Acorns for that. Other apps, like Robinhood, allows you to buy fractional shares of corporations like Tesla and Apple. Apps like Fundraise allow you to have a diversified portfolio for as little as a few hundred bucks.
However, you want to go about investing, keep in mind that time is your biggest ally in investments. The longer the time you have before retirement, the bigger the amount you are most likely to have as an investor.
3. No clear goals in life
Your life goals will determine the choices that you make. If you have no clear goals and plans in life, you cannot make any real impactful decisions to secure your future. You will wander aimlessly in life making the wrong decisions that you might later regret. You will end up wasting precious time and resources that you could have directed to other fruitful and productive endeavors if you only had clearly-defined life goals.
4. Thinking too much about expenses instead of income
While thinking of cutting down on expenses may seem practical and even noble to a certain point, you can only cut down on so much. If you keep your eyes focused on saving money instead of making more of it, then you’re still limited to how much money is coming in. Whereas if you look for other income streams that will give you more liquidity, you have better chances of securing your future. Limit your spending as you increase your money-making capability. That’s where the sweet spot is.
5. Failing to protect your financial security
Often, we visualize what we would want our life to be like when we retire. And in most cases, we have nothing but the best planned for it. However, the reality is, somewhere along the way, life surprises us with unexpected blows that are beyond our control such as a stock market crash, a medical emergency, loss of a job or business, and even the pandemic we’re in right now.
The only way you can protect your future is to secure your finances by diversifying your investments, having insurance, having enough savings in the bank, and a basic estate plan among others.
6. Not asking for help or guidance
Lastly, if you want to make it in life, if you want to have a successful retirement, you cannot do it alone. You will need help and guidance. A wise investor knows that he does not know everything and will do whatever he needs to help fill in those gaps. He talks to other people about it, consults the experts, and utilizes technology in helpful ways.
If you fail to recognize the need to humble yourself and ask for guidance and assistance, you will have a hard time securing your future. Don’t be that guy. Be better.
When it comes to retirement preparations, what you do and don’t do matter a lot. No matter how great your plans are for retirement, the road to it is peppered with challenges. Be wise with how you manage your time and resources to ensure that you can enjoy your golden years.