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4 Words that Can Derail Your Retirement Savings

Retirement is coming. Before you know it, you will experience the result of your retirement savings.

When discussing retirement savings, the words we use can reveal a lot about our understanding of what it takes to set aside enough for retirement. Here are a few words that can derail your retirement savings:

  1. Later. As in, “I will start saving later.” Some of the most important years of retirement savings are found in early adulthood. This is due to compounding, where your money earns on its earnings. If you are past early adulthood, don’t fret, just get started. This saying comes to mind—“The best time to plant a tree was twenty years ago. The second best time is now.”

  2. Safe. As in, “I am going to play it safe with my money.” If you are going to have enough for your retirement years, more than likely, you need to take some reasonable risks. Keeping your money in a savings account, CD (certificate of deposit), or money market account will not create the gains you need. You will need to place your money into some type of investment, like an index fund.

  3. Risky. As in, “I am going to invest in this really risky stock.” Don’t invest in a stock just because your friend said he feels good about it’s potential. Your retirement savings is not your play account. Your account’s performance will have significant financial consequences for your future. It is not the place for really risky investments.

  4. Fine. As in “Everything will be fine.” This thought often leads people to be lackadaisical with their retirement savings. Sometimes, they set aside money, and sometimes they don’t. Sometimes they pay attention to their investments, and sometimes they don’t. Be consistent with your savings and pay attention to your investments. Assuming that everything will somehow work itself out in the end increases the chances that it won’t.

Make it a goal to set aside 15% of your gross income for retirement. And don’t fall for these words that can derail your retirement savings.


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