Are you screwing up your retirement? You may not even be aware that you are, but here are a few approaches to doing so.
Keeping the Nest Full
Traditionally, the societal custom is that parents raise and provide for your children, and when they become adults, they move out and learn to take care of themselves. In time, the parents retire, progressively age, and eventually need help taking care of themselves. At this point, the children, who are now independent, responsible, working adults, step in and take care of their parents. Lately, it seems like many adult children are skipping the whole living independently part. They may have children too, so now their parents are housing and paying for three generations of the family. Doing so can shave a lot off of one’s income and leave little extra for savings. The way in which not “emptying the nest” increases expenses can really screw up your retirement.
Not making wise health choices and seeking preventative care can really hurt you. Medical problems may not only cause financial burden but can also impact longevity and quality of life. Things such as smoking, obesity, drinking too much, and not getting routine checkups and screenings can lead to many chronic conditions, such as heart disease, stroke, diabetes, hypertension, cancer, kidney, and liver disease. Even if the medical bills don’t scrape away your finances, things like chemotherapy, pacemakers, kidney dialysis, daily insulin injections, and frequent, long hospital stay will drag down your quality of life and inevitably screw up your retirement.
Out of Date Plan
Make sure to keep an eye on your retirement plan so that it stays current. It would really be a shame to think you are in shape to retire comfortably and then be blind sighted after it is too late.
Working for Too Long
A lot of people think if they have worked somewhere for a long time, their job is secure, but this is not the case. In fact, age can cause some to lose their jobs because they are more costly to employers than younger people. Some employers will even offer financial incentives for older employees to leave, make an effort to make the work environment negative for them, or pay lawyers to help them find a way to dispose of the employee that will not put them at risk for a lawsuit.
Drawbacks of Older Employees
- More susceptible to illness or injury
- High Healthcare Costs
- Senior employees are paid more
- Not savvy to new technologies
Not Saving Enough
There is no such thing as saving too much, and you can never start too early. Every extra dollar you spend adds up over the years and can make a big impact on your future. Prioritize saving and don’t screw up your retirement by wasting money on things you don’t need.
The faster you can pay off your home, the better. It is unwise to keep taking out equity to refinance your home. It takes time to really reap the benefits of compounded interest, and you should not rob yourself of this potential source of funding and add to the risk of screwing up your retirement.
Having too large of a mortgage payment is another thing that can screw up your retirement. Try to keep this payment between 1/4th and 1/5th of your earnings.
Mortgage in Reverse
Taking out a reverse mortgage at an early phase and life may seem like a good quick fix for debt, but it can really hurt in the long run. Restricting yourself to preset financial earnings when you are young and have very little equity can eventually screw up your retirement.
My Employer’s got my Back
In the good old days, the employer retirement plan was often enough to get by after your career came to an end. A pension seemed like the ultimate security blanket. Now, pensions are progressively becoming a rarity. If you are lucky enough to get a pension, you can kiss it goodbye if the company goes under.
Even state service employees, like police officers and firefighters are taking a hit. Many of their pension funds do not lack enough money to sufficiently cover everyone. Cities are unions are constantly at war.
Federal government employees were always thought to have held the golden ticket in terms of lucrative pensions, but even these funds are in trillions of dollars’ worth of do not contain enough to sufficiently cover everyone anymore.
No matter who you are employed by, embrace the account that funds your retirement. Save every dollar you can and contribute to it. Once you screw up your retirement the damage is done. You cannot travel back and time and undo your spending or redo your saving. Seek financial advising and develop a budget early in life so that you will be prepared for a comfortable future.