Saving for retirement is an uphill task for most people, but knowingly or unknowingly, you can make this already challenging task a costly mistake. This article will highlight some of the common errors that can cost you your retirement savings, and show you the best way to stretch a dollar to its limits.
It is advisable to pay special attention to retirement savings plan to guarantee yourself some financial security during retirement. Having worked hard for many years, your golden or retirement years should be as enjoyable as possible, but if not handled with caution and good planning, this period can turn to out to be a nightmare. It is possible to control most retirement planning mistakes if you are just willing to listen to some advice.
To begin with, it is always advisable to use a retirement calculator when planning for your retirement. If you have not been using a calculator, it is time for you to reconsider your strategy. A retirement calculator helps you set your retirement on the right path by assisting you to estimate or predict benefits or possible earnings.
To use a retirement calculator, you only need to input your expected time of retirement and what you make to predict your financial position during retirement. Take a step in the right direction by establishing a foundation of good sense and understanding of your potential financial position. It is always important to know your position as time goes by to avoid surprises when you eventually stop work.
Secondly, look out for your employer’s 401k match and take full advantage. In fact, when looking for free money, you can find it through your employer’s 401k match- they will sometimes match up to 5 or 6% of your contributions.
Thirdly, most people lose a lot of money in what referred to as “record keeping” fees, and it is time you also gave the issue serious consideration. Some retirement plans refer to the fees as “account maintenance” fees, and you will just continue losing your savings if you do not make the necessary changes.
According to industry experts, a 1.5% account maintenance fee is reasonable, but some companies charge up to 4% of your savings. This is complete exploitation as it is a significant amount of money. You should look out for a retirement plan that has acceptable “record-keeping” fees to reclaim your savings.
Finally, it is essential to monitor your account on a regular basis to reset your goals or know your current position. Taking years before checking your account is a huge mistake.