Life is a series of struggles that you have to overcome and each struggle requires an adequate amount of preparation. To get into college, you have to do good in high school and on your SATs. To get into graduate or professional school, you have to do flawlessly well in your undergraduate studies. To advance in your job, you have to be able to excel in a competitive work environment. Life is a merciless, unforgiving beast that will eat you alive if you mess up on just one thing, but the only time you will get to relax is during retirement and even preparing for retirement is something you can’t afford to ruin. So what we’re going to do is point out all the retirement traps that you could encounter so that you don’t fall into them.
Not Saving, But Procrastinating
This is the first mistake people make. They always procrastinate on the things that they want to do the least, even though these things are probably the healthiest things that they should be doing. You need decades to save for your retirement, not just years. What you save for retirement is not going to pop into existence in a second. Most experts recommend that if you have already graduated from college, you should start saving for retirement, even though you are already in debt due to the financial aid you got as a student. Investments are also a good way of saving up the money you need so you can spend the rest of your years in relaxation. The best thing about Acorns and Robinhood is that these two apps are great for investors who want to start small, which is a great and healthy way to start. You never know what small investments can turn into.
Letting Debts Come Back to Haunt You
Debts may seem small at first, but they will get bigger sooner than you realize, especially with the fact that many of them carry dangerously heavy interest with them. If you want anything that will absolutely kill your financial well-being, it is being in a state of constant debt. Debts need to be dealt with gradually over a number of years.
People are also making use of personal loans to wriggle themselves out of the shackles of debt. There are some are great references that you can use such as MoneyLion. You may want to also look into AmOne which is also great to find the personal loans of your preference.
Living without a Financial Plan
If you don’t have a plan, you’re doomed! It’s a fact that many people are not willing to face. We’re not asking you to write a Harvard MBA business plan so that you can retire. What you need to be doing is setting goals for yourself so that you can develop a mentality of being goal-oriented. Given so, it is essential that you create a viable budget plan that can work with the way you live. A good idea is to follow the 80/20 rule: using only 80% of your income for expenses and save 20% for long-term financial goals. It’s important to remember that you only spend on essentials.
Don’t Be Overdependent on Social Security
Social security should only be one of your sources of income when you are retired. It’s the savings that you have built up over the years that will help you live better. Your social security fund alone will never be able to sustain a decent way of living, which is why you need to start saving and investing from the very beginning.
