4 Personal Finance Mistakes That Could Destroy Your Retirement Account
Unless you truly, madly, deeply love what you do, chances are you don't want to be working every day of your life until you die. No, you want to retire to a post-65 world where you can do whatever you want, focus on your hobbies, maybe volunteer part-time in a field you actually care about, and just plain not worry about money for once in your life.
Once you reach that point though, you still need to work. This time though, you're not working to make money, you're working to save it.
Few things in life are more soul-crushing than working hard all your life to build a healthy retirement fund, only lose it all within a few years and being forced to ask the assistant manager at your local fast food joint if they're hiring.
So what kind of personal finance mistakes should you avoid if you want to retire and stay retired? Here are some sadly common issues retirees face every day:
Not Saving Enough Prior to Retirement
As people love to say, you need to learn to crawl before you can walk.
Likewise, before you retire, you need to make damn sure you have enough money to last you how many years you have left on our big blue space rock.
The general rule is to take your current salary and ultimately save up about eight times that amount. So if you make $40000 a year, and by age 65 you have $320,000 or so in your retirement fund, then go ahead and kiss your annoying boss goodbye.
If, on the other hand, you only have $150,000, you're going to have a rough go of it in retirement. You'll either have to live exceptionally frugally, crawl back to work, or scratch lottery tickets until you find that magical elusive million-dollar winner.*
*DON'T DO THIS.
Spending Too Much After Retirement
OK, so you've got a half a million in the bank, and you're ready to retire. But what happens if in five years it's all gone?
This could very well happen if you just start spending money all willy-nilly, forgetting that you don't have a weekly check anymore to help replenish your bank account.
Expensive dinners, multiple exotic vacations, endless shopping trips, Vegas -- all of these, if left unchecked, can spell speedy doom for your retirement account.
As long as you keep track of your money, work out a regular budget, and constantly remind yourself that this money is meant to last you literally for the rest of your life, you should be OK. Forgetting all that though, is a recipe for disaster.
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Not Investing Your Retirement Funds Properly
A good way to increase your retirement money is through solid, smart investing. A good way to burn your retirement money faster than if the Joker threw it into a big pile and lit a match is through bad, reckless investing.
Don't try to get rich by attaching yourself to the hot new stocks. Don't take unnecessary chances with unproven money methods like Bitcoin.
Instead, invest in products and companies with proven track records. These companies have stocks that will almost certainly never plummet, and can offer you a much higher chance at generating a decent, livable income than investing thousands in some random Internet startup because their commercial uses a catchy jingle.
Falling for Scams
Of course, even the smartest, most financially wily retiree will find themselves in giant trouble if they fall for a scam. They're everywhere, and will always be everywhere, because they unfortunately work.
Ambiguous charities, Nigerian princes, and foreign lotteries still exist because sending thousands of emails every day costs them nothing, and all they need is one trusting sucker to take the bait and they've just made a ton of money.
You worked hard for your money -- they didn't. If you truly want to donate to charity, there are plenty of legitimate ones out there, and web sites that will help you find them.
Don't lose everything because some backwoods criminal said you won the Chinese lottery, and then drained your bank account because you believed them.