On The Agenda:
Today we’re sharing five of the most common retirement mistakes. Find out what they are and how you can avoid them.
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Episode Show Notes:
On this episode of How Money Works, Craig and Jennifer Moser share some of the most common retirement mistakes and how you can avoid them.
Ignoring tax implications of your retirement savings future
Your 401k is probably the easiest place to save money. It goes into an account and you let it accrue, and when you retire, you’re supposed to be at a lower tax rate, right?
Every single dime that comes out of that pre-tax account has the filter of taxes. That means when you look at a $1 million IRA, not all of that money is yours. Part of it belongs to the federal and state government. They will charge you to take a withdrawal.
Here’s the harsh reality – you’re going to pay the taxes. It’s just the way that it works.
Starting Social Security too early
When you quit work, you’re going to feel a little bit of desperation because you don’t have a paycheck. You put all this money away and you had this cash flow. Now your finances are different.
You need to look at how long you might live and how much your Social Security will grow if you leave it alone for a few more years.
Focusing on returns instead of income during retirement
Everybody wants good returns, but if all you’re looking at is did my account beat yours, you’re ignoring the fact that it’s not a race. If you put that money at too much risk, you could lose it.
Listen to the full episode or use the timestamps below to jump to a certain section. Thanks for listening.
0:46 – Ignoring tax implications
4:04 – Social Security
6:43 – Returns instead of income
8:07 – Friends and family
11:20 – Too aggressive or conservative
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