Unless you have plans to spend your Golden Years working under the Golden Arches, it’s time to consider the strategies for a prosperous retirement.
Investment-adviser Web site motleyfool.com recommends you avoid these five mistakes to give yourself a better chance at building a comfortable nest egg:
- Procrastinating. Those who fail to plan … well, you know the rest. A surefire way to make mess of retirement planning is to avoid retirement planning. Putting it off “for a couple of days” soon turns into a couple of years, and the next thing you know, you’re pawning that gold watch for a couple of cans of tuna — and not the fancy albacore, we might add.
- Skipping an employer plan. If your firm has a 401(k) or similar plan and you’re not in it, hit yourself in the face with your fist. If your firm has a matching-contribution plan and you’re still not in it, use a baseball bat instead of your fist. You’re missing out on tax savings, compounding and free money. If you have the money taken right out of your paycheck, you’ll hardly miss the amount after a while.
- Saving for college first. Look at it this way: If you put all your spare money into a college fund for your kids, do you think they’re going to fund your retirement? Good luck with that. That’s not to say you shouldn’t try to save for your children’s education, but your retirement is the first priority.
- Investing too conservatively. The recent market meltdown was enough to scare anyone into putting money into only the safest — and lowest paying — investments. Most advisers say that’s a mistake, especially if you’re more than five years from retirement. Putting your money in blue chips is OK, however. Better there than in ultraconservative holdings.
- Investing too aggressively. This of course is the flip side of the too-conservative approach. Some may feel they have to catch up — quickly — for recent market losses by taking chances on risky stocks. Don’t do it. Stick with solid, moderate-risk investments. And the diversity rule is: Don’t put yourself in a position where the failure of one part of your investments dooms your whole portfolio.
