Tags: ways | squander | retirement | savings

6 Ways People Squander Their Retirement Savings

6 Ways People Squander Their Retirement Savings
(Yukchong-Kwan/Dreamstime)

By    |   Friday, 30 August 2019 12:14 AM

You’ve probably read or heard about studies showing only a small percentage of people are saving enough for retirement. The reasons may include squandering their savings through neglect or unnecessary spending over the years.

They might do this without even realizing it. Retirement can seem a long way away at times, and so they concentrate on financial matters of the moment. Then they become panicked as retirement gets closer and they’ve killed their chances of a comfortable living for the golden years.

Here are six ways people squander their retirement savings:

  1. Borrowing from savings — There may be times when financial problems seem too much of a struggle, so borrowing from retirement savings appears to be an option. You can take out a loan from a 401(k), but that’s just squandering the money you’re working for, according to the Dave Ramsey website. You hurt the fund’s growth potential and also have 60 days to pay off the balance if you lose your job.
  2. Not diversifying — Pay attention to your retirement account and consult a financial adviser on a regular basis for changes to maintain healthy savings. Make sure the investments are diversified across sectors, stocks, and bonds. Have a reputable financial planner who knows how to invest wisely.
  3. Too much mortgage, car payments — Interest on a mortgage can build up to more than twice what it’s worth in 30 years. You can save half of those interest payments with a 15-year mortgage. The same goes for buying a car with a seven-year loan. Get a shorter loan or buy a good used car for far less.
  4. Credit debt — It’s so nice to pull out that card to buy whatever you want, but think of a credit card as real money and pay it off each month. Student loan debt is also becoming a national crisis. Save wisely for your child’s college education so it doesn’t cut into your retirement savings, CNN advises. Look for grants, scholarships, work-study programs, and affordable colleges.
  5. Buying on impulse — The money you spend on the things you don’t really need or use later on is money taken away from your retirement account. Don’t let boredom or mental stimulation interfere with shopping and buying. Buy only what you need, according to Time. Take a look around your home and see all the expensive stuff you bought that’s no longer valuable or enjoyable.
  6. Squandering that raise or bonus — You would also be squandering your retirement savings. It’s easy to celebrate when you get a promotion, raise, or bonus, but that extra money would fit nicely into a retirement account with stronger growth.

© 2020 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
You’ve probably read or heard about studies showing only a small percentage of people are saving enough for retirement. The reasons may include squandering their savings through neglect or unnecessary spending over the years.
ways, squander, retirement, savings
434
2019-14-30
Friday, 30 August 2019 12:14 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved