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Are You Making These Retirement Saving Mistakes?

Too many people wait too long to start thinking about how
much money they will need to finance their retirement.
Retirement seems far away when you’re in your 20s and 30s,
and it’s easy to think you’ll have plenty of time to worry about
saving later. That’s one mistake. Here are three more…


Not participating in a 401(k). Many employers don’t offer a
401(k) or similar retirement plan, but if yours does, you
should participate. This savings opportunity that can reap
great rewards, especially if you start when you’re in your 20s
and faithfully contribute for decades.


Saving only in a 401(k). Although contributing to a 401(k) is
great, that shouldn’t be your only vehicle for saving. If you are
a younger saver, you are putting all your money into a bucket
you can’t touch for 20 or 30 years. When you do withdraw it in
retirement, you’ll pay taxes because the taxes were deferred.
Put some balance in your portfolio with a Roth IRA, a Roth 401
(k) or a health savings account. Withdrawing from those Roth funds in retirement won’t result in taxes because the taxes were already paid when the money went in the account. HSA money isn’t
taxed if you withdraw it for qualified medical expenses. After you turn
65, you can withdraw it for any purpose, though you will pay taxes on
that withdrawal if not used for a qualified expense.

Company drivers v. Owner-operators. You can participate in a 401k in either situation. As an owner-operator, you can easily set up a "Single-owner" 401-k through your bank or investment company, like Schwab, Edward Jones or Fidelity.


Failing to embrace risk. When the 2008 financial crisis hit, plenty of
investors lost a substantial portion of their savings. The memory of
what happened to them—or to their parents—is still having repercussions.
Some people younger than 50 are too conservative with their
investments, so their money doesn’t grow as it could if they took more
risks. If you’re between the ages of 20 and 50, though, don’t panic. Time
is on your side. If you suffer a loss, you more than likely have plenty of
years to recover before you retire.


Dennis Bridges | 12/06/2017