Tag: Retirement Pitfalls
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10 Retirement Pitfalls: Investing Too Aggressively
The other side of #9 Investing Too Conservatively is this last pitfall, being too aggressive with your portfolio. 100% in foreign small cap stocks is probably too high for anyone, while you do have the potential for high returns, you also have the potential for high losses. While it is advocated that younger investors take…
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10 Retirement Pitfalls: Investing Too Conservatively
The general rule is that you should be aggressive when you’re younger and conservative when you’re older. Being too conservative when you’re young doesn’t take advantage of the one asset you are slowly losing, time; by being aggressive, you try to get the high returns while risking some losses. If you are young and your…
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10 Retirement Pitfalls: Not Using IRAs
I would’ve listed this particular pitfall higher up on the list, probably behind Not Getting 401K Match, since it’s similar to that pitfall; but this one involves not taking advantage of the various IRAs that may be available to you. Roth IRAs allow you to do some tax-free investing and other IRAs allow you do…
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10 Retirement Pitfalls: Not Having Insurance
Accidents happen and usually they’re expensive. When you’re lucky enough to have an accident that isn’t expensive, hopefully you have an emergency fund to help you through it; when you’re unlucky and have an accident that is expensive, hopefully you have some sort of insurance that can cover it. If you don’t have insurance to…
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10 Retirement Pitfalls: Buying Too Much House
This is similar to the “Avoid Credit Card Debt” pitfall, don’t buy too much house. Whereas credit card debt is bad because interest is high, an expensive mortgage is bad because it’s usually going to be around for a long long time (which I suppose is much like credit card debt if you can’t pay…
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10 Retirement Pitfalls: Depending On Windfalls
Anytime you depend on someone else, you run the risk of that person not coming in for you; when it comes to retirement, you do not want to depend on anything except for your own work. You don’t want to depend on inheritances, you don’t want to depend on Social Security, and you don’t want…
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10 Retirement Pitfalls: Avoid Credit Card Debt
I like to think of retirement saving as building a house and its crucial for one to have a solid foundation onto which to build this house, having credit card debt is the antithesis of having a solid foundation. When you’re talking about retirement, it’s about growing your nest egg… which is extremely difficult if…
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10 Retirement Pitfalls: Not Getting 401K Match
You like getting free money? Sure, me too, so why would anyone ever not contribute to their 401k and get their employer match? Well, there are people who do this and it’s absolutely unbelievable. If you just started working, review your benefits package to see whether your company offers an employer match on 401k contributions.…
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10 Retirement Pitfalls: Waiting
The power of compounding means that every year you wait, you don’t lose one year’s interest… you actually lose on the tail end of the compounding equation. Let’s say you have a maximum compounding interest lifespan of thirty years, starting when you’re twenty five. If you wait until you’re 26, you don’t lose interest from…