Steer Clear of These 5 Retirement Pitfalls

Simple mistakes can really hamper your retirement goals

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Not Maxing Out Contributions

From your first paycheck to your last, contributing to the two most important retirement-planning accounts in your arsenal — 401ks and IRAs — is fundamental to your retirement.

Let’s take the 401k tack first: If you are not already enrolled in a plan, enroll. Now. Once you’ve done that, look through your finances. If you can afford to max out your IRA contributions — $17,500 for those under 50, and $23,000 for those over 50 — do so. That’s doubly important because many companies will actually match some of your contributions — not going after your employer’s maximum match is essentially leaving free money on the table!

The nice thing is, once you’re in, payments will be automatically taken out of your paycheck — something you can’t automatically say about an IRA.

IRAs are a bit different in that while you can also enroll in a program through your employer (and yes, try and do that), a surprising number of people will just sit on their original amount. Don’t. Contribute, and again, contribute to the max — you can add up to $5,550 if you’re under age 50, and $6,500 if you’re age 50 and older. If your bank offers the service, you can set up an automatic deposit at regular intervals, and if not, set up an Outlook reminder, write it on a calendar, put a piece of string on your finger — whatever it takes.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/steer-clear-of-these-5-retirement-pitfalls/.

©2014 InvestorPlace Media, LLC

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