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Top 5 Retirement Planning Mistakes

Planning ahead is key to avoiding many retirement mistakes—approaching your goals realistically ensures your plan is reasonable and obtainable. Sadly, slipping up when preparing for your future is all too easy. In fact, the Federal Reserve estimates that 40% of adults believe that their retirement savings are headed in a good direction. Yet, the remaining 60% haven’t taken steps to fund their retirement or have even sabotaged their efforts. If you’re not sure where to start with your retirement planning, Top Investment Solutions can help. Here are the top 5 mistakes you’ll want to avoid when forming your own strategy. 

Quitting Your Job

On average, a worker will change jobs nearly a dozen times throughout his or her career. They often do so without thinking about the employer contributions for retirement funds they are leaving behind. From 401(k) plans to stock options, you likely won’t have complete ownership of the funds from your employer until you’ve reached a set point in time, such as five years. 

Avoid leaving your job until you determine your vesting situation, especially if the deadline is approaching. Think carefully about whether changing jobs is worth potentially losing those funds. 

Waiting to Save

Compounding interest allows all of the money you save now to potentially grow up until your retirement. Starting sooner rather than later means you can potentially grow more money, meaning now is the best time to begin. Try to cut back on spending and make saving your money a priority. According to experts, 10 to 15% of your lifetime working income should be saved for retirement. 

Not Creating a Wealth Management Strategy

Creating a wealth management strategy that matches your anticipated lifespan allows you to avoid sabotaging your future. Your financial strategy should include the age at which you plan to retire, the location, your overall health and other lifestyle details so you can determine how much you’ll need to save. Regularly update your plan according to your ongoing needs. A consultant at Top Investment Solutions can help you make a strategy that suits your long-term goals. 

Not Maxing Out Your Employer Match

Sign up for a 401(k) if your employer offers one, and maximize your contributions to get the most out of the employer match. The IRS has set a limit for the maximum contributions that the employer and employee can add, which is $66,000, or $73,000 for those with the catch-up contribution in 2023.

Developing Debt

If you have outstanding debts before you retire, your savings will likely be impacted. Try to keep an emergency fund available to avoid debt as retirement nears so you won’t need to fall on your savings to pay it off. Moreover, try to pay off or at least reduce debt before you enter retirement. That being said, experts say that you shouldn’t avoid saving for retirement to pay your debts; find a balance to do both. 

Call Our Team Today

Talk to our consultants about your retirement goals to ensure they match your realistic expectations. Call Top Investment Solutions today to explore pathways to the retirement you envision. 

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