5 Ways People Sabotage Their Own Retirement

[Common Sense Party]

Very interesting, common-sense stuff.

2. Waiting too long. Financial advisers find that people often delay saving for retirement until their debts are paid off, but that can mean sacrificing many years of compounding. Instead, advisers usually recommend opening a tax-advantaged retirement account as soon as you start working, even if you save just a small amount each pay period. Saving those small amounts--$25 per paycheck, for example--can help get a retirement account going, and employer contributions can help even more.

...

4. Investing too conservatively, or too aggressively. Twenty-somethings shouldn't have most of their retirement investments in bonds, or other conservative assets that barely keep up with inflation, and conversely, soon-to-be retirees should not have most of their nest egg in the stock market, which can drop unexpectedly at a moment's notice. Advisers generally recommend shifting into a more conservative portfolio as you age; a 30-year-old might have 30 percent in bonds and 70 percent in stocks while a 70-year-old would have the reverse mix.

5. Failing to anticipate a long life. With lifespans on the rise, retirees can count on living another 20 or 30 years--or longer--post-retirement age. That means they need even more savings than their parents' generation. Rising healthcare costs also eat up those funds, so erring on the side of a bigger retirement fund is essential.

If you find all this advice confounding, consider this strategy: Just save 18 percent. That's the savings rate a medium-earner ($43,084 in 2010) would need if he or she starts saving at age 35 and plans to retire at age 68 (assuming a 4 percent return on investments), according to the Boston College's Center for Retirement Research.

There's more at this link:
http://finance.yahoo.com/news/5-ways-people-sabotage-own-135934028.html

I find it interesting that the #1 act of self-sabotage they list is having children. Of course, there are people like my sister who claim that her daughter IS her retirement plan. I wonder how many people eschew saving for their own retirement in favor of paying for their kids' college? Bad idea.

Anyone out there saving 18% of their income?

Me neither.

[Turbineguy]

1. 6. Voting for republicans.

Repubs are in cahoots with Wall Streeters to steal your pension.

[Common Sense Party]

3. I almost posted the same thing

although my retirement savings aren't really affected much by who is in the White House or in Congress.

[seabeyond]

2. #4. sure hard to find the happy medium in this market. thanks. nt

[Common Sense Party]

4. Definitely true, but even a 50/50 bond/stock mix is better than

100% cash.

I was just reviewing one of my clients' 401(k) plans, and almost half the participants are 100% in the money market fund.

They earned less than one tenth of a percent last year.

[SheilaT]

5. The 18% is if you wait until age 35 to start saving.

If you start saving even ten years earlier, I suspect that 10% will be enough.

I think the other way people sabotage their ability to save is that they really, really think they need a brand new expensive car with all the bells and whistles, or they really, really need a lot of clothes and CD's or downloads from whatever, or must have that $5.00 fancy coffee every single day.

I'm not saying never indulge in some small luxury, but don't spend every penny that comes in and then wonder why you couldn't save for retirement.

[Common Sense Party]

6. Amen to that. When I was out knocking doors, meeting people as a beginning

financial advisor, people would tell me emphatically, "I don't have any money to invest for retirement!" And I would look over to their driveway and see the two new SUV's, the brand new boat, and I'd see the satellite dish on the roof, etc.

I know there are some people who genuinely CAN'T save ANYTHING, their financial straits are so dire. But far too many people have trouble distinguishing needs from wants, and--at least before the financial meltdown hit--the concept of "living within one's means" was a foreign concept to them.

[GreenMask]

7. Not a bunch...

I'm thoroughly convinced that, barring medical issues, anyone with $35k+/year can probably save for retirement (or at least stash some away). It may require a particular amount of sacrifice, but it can be done - at least in low-cost-of-living areas.

[Common Sense Party]

8. I agree.

I know people who are sitting on pretty nice nest eggs after years of living simply, and working hard but never earning more than $30 or $40K.

[Kingofalldems]

9. Bye freeper. Had you all along.

[Billy Patterson]

10. Retirement

I have read the whole article and found relevant information. I agree.

I like this post and also appreciate. This thread is really worth full for retirement peoples.

[GMR Transcription]

11. 5 ways people sabotage their own retirement

Hi,

Nice post. thank you for sharing this information about the retirement issues which people create on their own. Some of the major issues that being a reader I have came across includes waiting too long, investing too conservatively or too aggressively, and many such other issues faced or can say created by the people themselves.




Thank you once again...