Try to take these steps to avoid making the obvious mistakes that you won’t be able to recover from once you hit retirement.
Not knowing where your money goes. Tracking your expenses and figuring out at the end of every month where your finances go will allow you to figure out where you need to be cutting back costs. Once you realize where the majority of your money goes whether it is on retail, food, car payments, etc. will help you figure out how you can save.
Not having a plan. According to the Employee Benefit Research Institute, only 18 percent of U.S. workers say they are “very confident” of having enough money to live comfortably during their retirement years. By calculating your retirement planning goals, and committing to other regular saving goals could help your future greatly. Rather than solely calculating your retirement savings number, and funding your 401 (k) there are other vital things to consider. You should also review your asset allocation, investments, and total savings on a regular basis in case something changes. Having a set plan will lead you to a retirement that is attainable to your lifestyle rather than assuming that your financial situation will be comfortable.
Not taking advantage of your employer’s retirement savings program. When working for an employer who offers a 401 (k) or other retirement plan with a match program, take advantage of this opportunity. Many employers offer a match program that will be the best return on your dollar and allow you to defer your tax payment until later.
Miscalculating your saving needs. Most financial planners tell you that you need to save 80% of your retirement income. Keep in mind that as you retire, you will have more time for entertainment and travel. Using a retirement calculator will help you consider these costs. Try using Kiplinger’s Retirement Calculator in order to figure out how much money you should be saving each month to reach your retirement goals.