While you can learn from your mistakes, it will be a very expensive financial lesson if those snafus affect your retirement. When you’re young and you make an investing slip-up, you have years to recover and get on track for financial success. In your golden years, however, your investments become your paycheck for the rest of your life, so any mistakes affecting it are a lot more drastic.
Fortunately, most investors make the same retirement mistakes, and they are completely avoidable with some preparation:
Putting children above yourself
While it’s great to support your children, overextending your financial support after they become adults is one of the biggest retirement mistakes you can make. While you’ve (hopefully) accounted for the expenses involved in raising children, supporting your adult child can come as a complete surprise – and you’ll probably eat away at your retirement investments to account for it.
While supporting adult children is a personal decision, remember that you can’t help others if you don’t take care of yourself first. Otherwise, they’ll end up needing to support you come retirement. If you do have to support adult children, I recommend coming up with a solid game plan to get them back on their feet, and limiting the aid so it doesn’t affect your retirement.
Not taking advantage of employer matches
If your employee offers a 401(K) match, not taking full advantage of it is another one of the retirement mistakes you should avoid. A 401(k) match is essentially free money on the table, and it means that your employer will (fully or partially) match some of the money you invest in their 401(k) fund. Coupled with a 401(k)’s tax-free growth, this can be enormously helpful for growing your nest egg, and it’s something you should take full advantage of.
Being in a relationship doesn’t just have romantic benefits; couples can also team up to reach their financial goals faster. However, surveys have revealed that the majority of partners make major retirement mistakes by leaving each other in the dark instead.
Although many couples don’t help each other with retirement, it doesn’t mean you should avoid teamwork. Open and honest financial communication won’t only set the groundwork for financial success; it’s also highly correlated with a happier relationship.
Learn more about the retirement mistakes you need to avoid
At LexION Capital, we can help you avoid retirement mistakes by creating a bespoke investment portfolio to achieve your financial goals and needs. If you’d like to learn more, don’t hesitate to contact us today.