When I first started going to my financial advisor in 2019 at the tender (and all-too-adult) age of 29, I learned a lot about investing and the market itself. He was also able to provide some insight into how rare it is to find someone my age in his office. So here I am, approaching 30, thinking I am way behind in setting myself up for a financial future and retirement, and it turns out I am ahead of the curve. Not enough people are proactively building wealth. And that’s just one of five key mistakes you can make when setting yourself up for a successful retirement.
1. Getting started late
Too many people don’t think about their future until they are already living in it. As an example, my advisor provided lengthy anecdotes about how he doesn’t see most people in his office ready to invest until they reach their 50s, or until after they’ve “taken care of” other things in their lives. But getting started early is important for retirement, and could very well be the key to living a comfortable lifestyle in the latter part of your life.
2. Not holding out for the right advisor
Out of the people who do start a retirement fund or choose to invest in their future earlier in their life, many are stringent with the amount of money they choose to funnel into their 401K and IRA packages. To be fair, not everyone has a financial advisor they can trust, however investing the time to find that person is something you won’t regret. After all, they’re working for you, so you get to be as specific with your expectations as you’d like. When you have someone who can look at your income and your circumstances with their genius brain and help you make decisions you aren’t equipped to handle yourself, you both win. Find someone who is invested in the idea of bettering your life.
3. Investing too much energy in the short-term
Learning about the financial world can make a person a special sort of power-hungry. Gaining access to log in and check your Roth IRA, 401K, and other savings methods can sometimes be a trip for people who like to log in and check their percentages on a weekly – and sometimes even daily – basis. But here’s the deal. If you’re saving responsibly, you can’t access that money right now and you shouldn’t be able to for a while. You also have no immediate control over the outcome in most cases, so this is a login I’d implore you to write down and keep away from your own prying eyes. Our reliance on instant gratification can make this difficult, but my advisor had to remind me that – especially early on – checking in on my numbers too often will absolutely drive me insane. We already have too many stressors in our everyday lives. You’re playing the long game. Remember that.
4. Overpaying on fees and hidden payments
On the other side of that coin, you do want to make sure you’re keeping up with your financials on at least a quarterly basis. Many advisors will issue statements more often than this, and it will do you some good to glance at them every so often to make sure your funds are being allocated responsibly and correctly. You never want to be in a position where your funds were transferred incorrectly because of a computer mishap and now some random holdings company in Dallas is collecting a small monthly fee off of you. Those types of mistakes, unfortunately, happen and they can really add up. You’re responsible for your money. So many are sure it’s being used to your advantage.
**Remember that taxes will be taken out eventually as well, and larger fees if you withdraw money before you hit retirement. Educate yourself on these things before moving anything around.
5. Forgetting about bonuses and government funding
Sometimes the government does set things up correctly. If you work with an advisor you trust, they will have shortcuts and ideas to produce better results for you. But keep your ears to the ground, especially as you approach retirement, for deals, opportunities, and government build-ins. Currently, most retirees are overlooking social security bonuses that could really help give them a leg up to live in the lap of luxury and help provide for their families in those golden years.
At the end of the day, your finances need to work in your favor. Whether you have the means to retire at 35, 55, or 70, you want to be able to thrive off of those savings you have tucked away over the years. You can achieve this by making sure you are being responsible for your future and avoiding these key mistakes. If you’re ready to diversify your portfolio, check out these investment suggestions from Suze Orman.