Not having to go through the daily grind anymore but kicking back and relaxing instead is something to look forward to. However, once you’ve retired you’ll need to have enough money to survive on without that monthly paycheque coming in. This takes careful planning and preparation long before you reach retirement age. If you don’t plan for retirement early on, you may find yourself in dire straits in old age. Here are 20 signs that you might retire broke.
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You didn’t start saving early
The earlier you start saving for retirement, the more you’ll have by the time you reach retirement age. If you wait too long to start saving, you’ll have to save much more every month in order to build up your retirement nest egg in time. Ideally you should start saving for retirement when you land your first job. You should avoid these money mistakes, too.
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You may also like: 15 retirement tax tips that'll save your nest egg.

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You live beyond your means
Spending more than you can actually afford to means you won’t be able to save. Instead of trying to keep up with the Joneses, start living frugally and put away more money for retirement. And please, don't try any of these ridiculous ways people try to save money.

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You have credit card debt
Credit card debt is a sure sign that you’re spending more than you can afford. It also means that you have to pay more in interest than the items you bought with your card actually cost. The sooner you can get rid of credit-card debt, the less money you’ll lose on those interest payments.

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You’re still paying off your house or car
Like credit card debt, house or car payments cost more the longer you take to pay, since you’ll be paying more in interest. Use any financial windfall you can to pay off your house or car sooner so you won’t have to worry about making those payments once you live on a retirement budget.
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You may also like: 20 ways to cut your car costs.

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You haven’t considered how much you’ll need
If you want to maintain the lifestyle you’re used to once you’ve retired, you’ll need at least 70 per cent of your current income in retirement. There are several online calculators that can help you work out how much you’ll need for retirement and how much you need to save every month to get to that amount. And if you want to retire early, consider this.

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You haven’t considered inflation
When you work out how much you need to save for retirement, remember to include inflation in your calculations. Things will be much more expensive by the time you retire than they are now, so you might need more money than you thought you did.
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You may also like: the warmest places to retire in Canada.

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You don’t have a budget
One of the main reasons people overspend is that they don’t have a budget. Make it a habit to regularly go through your finances and draw up a budget that you stick to religiously. Find ways to cut your expenses so that you’ll have more money to put into your retirement savings. If you need ideas, here are 20 ways to save $1,000 a month.

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You don’t have an emergency fund
Whether it’s your car that breaks down or whether it’s an accident or illness that keeps you from working and earning an income, when things go wrong, they can be very costly. Put some money aside every month for emergencies so that you won’t have to go into debt when these situations arise.

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You haven’t invested
Investing wisely is a way of creating an extra stream of income which will help you in retirement. The secret is to avoid get-rich-quick schemes and to make less risky investments. A financial advisor can help you decide where and how to invest your money for the best returns.

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You have no alternative sources of income
Your retirement savings may bring in just enough money for you to get by once you’ve stopped working but having extra sources of income (like this list of 20 ways to earn money while you're sleeping) will help you live more comfortably. If you can find alternative sources of income early on, they will also help you make enough to save more money for retirement.

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You cash out your retirement savings plan when you change jobs
Most employers contribute to employees’ retirement savings plans and often you have the option of cashing out that plan when you move on to another job. However, it may be too tempting to overspend when you suddenly have all that money available.
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You may also like: the 30 best companies to work for in Canada.

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You only contribute to your RRSP
Instead of only contributing to your RRSP, make monthly contributions to other savings plans too. For instance, get a high-yield savings account that earns more interest.

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You’re not taking care of your health
Health problems not only inhibit your ability to work and earn an income but can also become very costly to treat. Take care of your health by eating right, staying active and not engaging in risky behaviour. Also learn how to manage your stress levels and if your job is bad for your health, find another one.

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You haven’t taught your kids financial responsibility
Teach your children from a young age to live frugally and to be responsible with money. The sooner they can manage their own debt, the sooner they’ll stop expecting you to bail them out. You’ll then be able to focus on yourself and your future.

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You’re not taking full advantage of your benefits
The best companies to work for now offer perks that go far beyond good health and pension benefits. These perks can be anything from free lunches to fitness classes or tuition subsidies. Taking full advantage of your employee benefits while you can will help you save more money for the day when you have to pay your own way.

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You only think about the short term
It’s easy to focus on the short term when saving for something, such as that dream trip around the world. However, for a successful retirement you need to change your mindset and focus on making – and saving – enough in the long term.

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You don’t match your employer’s contributions to your RRSP
In order to ensure that you contribute enough to your RRSP, don’t pay less than your employer’s contribution. At least match the amount your employer pays but if you can, pay even more. These contributions are tax deductible so you’ll save more in terms of taxes too.

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You haven’t considered taxes
One of your biggest post-retirement expenses may be what you need to pay to the taxman. Find out about all the tax benefits you will qualify for and what you need to do to claim these benefits. Also remember to file your tax returns on time.

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Your net worth is tied up in your house
Owning a house that’s fully paid off is a great way to increase your net worth but it’s not going to pay for your day-to-day expenses. You also need a cash flow, so make sure that you have enough liquid assets as well, for instance by making your house earn you some rental income.

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You haven’t considered downsizing
One of the keys to a carefree retirement is to start downsizing your life as you near retirement age. One way to do this is to sell your large family home and move into a smaller, more affordable place. It’s also a good idea to consider relocating to a more affordable city or even another country.
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