What do you think about when you hear the word ‘retirement’? Is it something you daydream about? Does the word make you anxious? No matter your reaction, there’s no denying that it’s important. If you’re working hard to save your way to retirement, here are three mistakes you should watch out for . . .
Not taking advantage of your employer match: If you’re lucky enough to work for a company that offers some kind of 401(k) match, you should take full advantage. If your company is willing to match your contributions dollar for dollar (up to a certain point), make sure you’re maxing it out. That’s free money. A small sacrifice now will definitely pay off in the future.
Borrowing from your 401k: Being able to borrow from your 401k is a great feature if you’re dealing with a major emergency, but for any reason short of that, you probably want to avoid doing it. Not only would you miss out on the compound growth of that money, but you would more than likely cut back on your contributions (and your company match) during that time, and that could really set you back.
Retiring too early: Average life spans are longer than ever. Deciding when to retire is a huge deal. Waiting longer to receive retirement benefits can prevent you from missing out on a lot of cash, and can help make sure you don’t outlive your money. Why retire earlier if you’re not going to be able to enjoy that time?