Believe it or not, retirement is right around the corner. Even if you’re still young, it’s never too early to start thinking about your retirement. Hoping to make the most of your Golden Years? Here are 12 mistakes that could cost you big.
Starting too late
It is never too early to start saving. If you're young, retirement may feel like it's a long way from now but that's really the best time to get started. Don't wait until you have to worry about things like car payments, a mortgage or the cost that comes with having a family. If you’ve started planning early enough, you’ll be able to retire with less money. You may also want to consider saving by investing in these items that will save you hundreds of dollars over time.
Canada Revenue Agency (CRA) allows you to contribute a maximum to your RRSP each year --do it! Even if you can't contribute the full amount, putting in something means that you will at least have something to show when you're ready to retire. If putting in a lump sum is too stressful, set up automatic contributions that are taken directly from your paychecks so you won't even notice the missing funds.
For more, don't miss these 15 retirement tax tips that'll save your nest egg.
Investing in stocks is one of the best ways to watch your money grow. We get it though, stocks are confusing. If you're clueless when it comes to trading, stick to long term investments with low to medium risk so you don't have to stress about what's happening in the market.
Plus, make your nest egg go even further with the top 20 best places to retire in Canada.
Investing in one place
If you take one lesson from Investing 101, it is to diversify. Never put all of your eggs in one basket because history has shown us that the market can be volitile and you don't want to loose everything all at once if there's a crash. Break up investments and scatter them across the market so you're covered no matter what happens.
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Supporting your kids
Paying your kids way through university so that they don't have to worry about debt is super generous but not realistic for everyone. Don't risk messing up your own finances by dipping into your savings when you really shouldn't be. If you didn't set up some sort of educational fund for your kids, make sure you can really afford to write them that cheque for school.
Plus, don't miss 20 more surefire ways to retire at 50.
Buying flashy cars
Cars are one of the worst investments. Sure, we need one to get from point A to B, but funneling a ton of money towards something that is costly to run and maintain is not a practical way to be smart with your money.
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Planning to work late
These days, continuing to work into your retirement is pretty common. That said, this shouldn't be factored into your savings plan as you never know what may arise in the future that could potentially prevent you from doing this.
Prepare yourself for the good life with our list of the top 20 sunny places to retire if you hate the cold.
Your house will probably be one of the biggest investments you make in your life. Try to avoid using it like an ATM with multiple mortgages so that you have the funds to do other things.
For more, here are some tips to help you learn how to retire with millions.
We get it, who wouldn't want to retire early? If you can manage it, all the power to you but for most people, retiring early is not a realistic option and could result in a decreased quality of life or a return to the workforce, into any of these 20 best jobs for retirees.
Dipping in early
Dipping into your savings early can be really tempting but will end up costing you more in the end. Even if you make a promise to yourself to pay it back right away, you still won't be contributing as much or earning as much interest if you remove it.
People are living longer which means that retirement dollars need to stretch further than ever. Keep this in mind when you are planning to save and make sure you account for a little extra --just in case.
On the other end of the spectrum, be proactive about your retirement now by living a healthy lifestyle. Partying hard and living large in your youth can put you at greater risk for costly health problems that will not only eat up your retirment funds but may force you to leave the workforce early.