3 Costly Retirement Mistakes to Avoid
Retirement is a period of life you've earned after years of hard work and dedication to bringing home a paycheck, and so the last thing you want to do is make a mistake that turns your seniors years into a long-term financial nightmare. As such, it pays to avoid the following blunders at all costs.
Setting money aside for retirement is important. If you fail to do so, you'll risk falling short on the bill-paying front when your time in the workforce comes to an end. But in addition to diligently funding your 401(k) or IRA, you'll also need to do a good job of putting your savings to work -- namely, by investing in a reasonably aggressive fashion to generate growth. That way, you'll be more likely to have enough money to pay your living expenses in retirement and enjoy the comfortable lifestyle you deserve.
Imagine you manage to sock away $500 a month for retirement over a 40-year period. If your investments during that time were to generate an average annual 7% return, which is doable with a stock-heavy portfolio, you'd grow your savings to about $1.2 million. But watch what happens when you play it too safe and invest heavily in conservative investments, like bonds. In that case, you may be looking at a 4% average yearly return over time, leaving you with just $570,00 to work with during your golden years.
Source Fool.com
