Ten Things that can Ruin your Retirement

Discussion in Retirement Plans started by novasparker • Oct 4, 2012.

  1. novasparker

    novasparkerActive Member

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    I came across this online and figured I'd share. I know all of us are striving to retire and enjoy our twilight years one day. Thoughts? Anything you would add to the list?

    Ignoring Social Security
    The Social Security Administration calculates your retirement benefits on 35 years of employment. If you don’t work 35 years before you retire, you’ll receive less Social Security at retirement. If your earnings are meager during your work life, your Social Security benefits will be similar. According to the Social Security Administration, Social Security retirement benefits cover 40 percent to 50 percent of your pre-retirement income, and you should need 70 percent to 80 percent of pre-retirement income for retirement. Plan for income from another source equal to your Social Security retirement benefits.

    Missing Out on Contributions
    Your employer may help you accumulate money for your future with matching funds. A study done on 401(k) plans in 2010 by Financial Engines showed that 47 percent of workers under the age of 40 didn’t contribute enough to get the full employer match. Your employer doesn’t match when you don’t pay your share and you lose free money.

    Not Saving Enough for Retirement
    Save with the same ambition that you spend. Enjoy watching your money grow every year so you can accumulate retirement funds over your lifetime. Develop your own sources for retirement income such as a savings account or a valuable collection in addition to other investments.

    Spending Retirement Funds Early
    You may look to your 401(k) for a source of money when you need it, but borrowing from your retirement money stops the interest on the borrowed funds. Failure to pay the money back might result in penalties and taxes and will knock you off track for your retirement savings.

    Expecting to Live Where You Are
    With career moves and family dynamics, don't count on living in the same house all of your life. According to the U.S. Census, the average American moves 11.7 times in a lifetime and the highest mobility rates are found among young people. Expensive remodeling and additions on your current home might get in the way of your financial goals because you might not recoup the costs if you have to move.

    Thinking You'll Work Through Retirement
    You may think you’ll never quit work, but layoffs and medical conditions get in the way of best-laid plans. You might be able to work until you’re 70 when you get the maximum Social Security retirement benefit, but you may live another 15 to 20 years after that. Even the best employer might get tired of your prune face and gimpy walk and trade you in for younger help.

    Planning to Retire at 50
    Retirement at 50 can be a dream, but not an expectation. Every year you work adds to your Social Security and your assets and is one less year you live without employment income. Retiring too early may result in outliving your money and limiting your choices.

    Failing to Stay Out of Debt
    Interest charges over your lifetime represent a large chunk of money you could save for retirement. If you don't have to buy now, save until you can pay cash and skip the interest charges. Make reasonable purchases and skip the extravagances.

    Living an Unhealthy Lifestyle
    A debilitating condition can ruin your retirement years, both in health and in medical expenses. Take care of your health while you're young to enjoy your retirement. MSN Money reports that the average couple retiring at 65 spends $285,000 in healthcare costs. Beat the average with a lifetime of healthy living.

    Failing to Develop A Plan
    Your financial plan will change, but planning for the future with goals for the year, for five years and for 10 years is essential to getting where you want to be. Save part of every paycheck to reach your goals for the future so you don't look back and realize that you've been so busy spending, you've lost years of saving for what you really want in life.
     
  2. Jessi

    Jessi<a href="http://www.quirkycookery.com">QuirkyCooke

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    Really? I know so many people who have lived in the same town for their entire lives. Or they lived there during their childhood, moved away, and then either stayed in that new location or moved back to their original home location. I have moved around quite a bit and people always look at me like I'm crazy when I tell them that because they haven't moved much at all.
     
  3. dissn_it

    dissn_itActive Member

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    Right at this moment, we are just trying to survive our working years! :D
    We do need to start planning for retirement so I found this information to be very helpfull. I just don't see Social Security being there for me by the time I get to retirement age and employers are not the best source of retirement plans like they used to be. I would like to start looking at other options. Thanks for the share.
     
  4. alc89

    alc89Active Member

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    This is the CRAZIEST one I read! I can't believe that people don't realize how much they can benefit from 401(k)s with matching employers. This is essentially free money for SAVING money pre-tax. Anyone on a 401(k) with their employer is obviously making the right decision, but if they're not getting the full benefit, it really baffles my mind. When I was in college, I worked in retail and they offered me a 401(k) with a company match. Sure, the extra money would have been nice, but I was smart and I did the maximum contribution. I had doubled the amount of money in my pot that way - it's just more money for me to work with in the future! Thanks for this list; really eye-opening stuff!
     
  5. Pat

    PatWell-Known Member

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    Thanks for sharing this important list of what people need to look at during their acquiring stage of life. Many people are living day to day, not realizing time moves faster than we think. Keeping ourselves healthy is one of the most important things to do, no one wants to live to be old and sick and depending on someone else for all of their basic needs.
     
  6. mark.1

    mark.1New Member

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    There are plenty of ways to wreck your retirement. But knowing the top 10 might give you a fighting chance of at least avoiding the big ones. Of course, as with many things in financial planning, much is subject to debate. Indeed, there are plenty of times when it’s difficult to make blanket statements. Here’s what one researcher and one financial planner had to say about the subject.
    Don’t Make Saving a Habit, Leave Matching Funds on the Table, Borrow against 401(k) Savings, Cash Out 401(k) Savings, Jump In and Out of the Market, Rely on Home Equity, Do Not Diversify Savings, Underestimate Longevity, Ignore Inflation, Stay in Debt
     
  7. william22

    william22New Member

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    Ten Things that can Ruin your Retirement - posted in Retirement: I came across this online and figured Id share.
     
  8. trishgl

    trishglActive Member

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    Thank you very much for info and the statistics are a great way of sending the important message of planning for retirement. I'm sure not many of us think about keeping healthy and fit while we are younger as part of our retirement plan but it is a very logical step to take. It also underlines the fact that we need to make a more detailed plan of attack when it comes to retirement and not just the vague idea that we'll still work part-time in order to cover additional expenses one might need.