2023-08-18 16:09:49
No one wants to work until they die, and no one should have to, but sometimes poor financial choices jeopardize people’s economic health.
Certified financial planner Tim Jensen, who works in Denver, Colorado, told Reader’s Digest the 5 mistakes he frequently sees.
1. Wait 65 to retire
A widely held belief is that you don’t retire before age 65.
However, this age is not necessary, so it is better to retire according to your savings and your goals.
“The important thing is to set a retirement age that fits your life, and then develop a retirement plan that will allow you to reach that goal,” argues Jensen.
2. You’re never too young to worry regarding retirement
In financial circles, it is often said that the eighth wonder of the world is compound interest, says the financial planner.
“In principle, the money invested over time grows exponentially, but too many people don’t understand exactly how much this can make their money grow,” he laments.
It is therefore important to start planning for retirement as early as possible.
According to Mr. Jensen, 30 is a good age to get started.
3. Not having a retirement account
Many jobs do not offer benefits. It is then essential to open retirement accounts and invest money in them.
“Even if you have a job that only allows you to live from day to day, you should try to set aside a small amount of money for retirement,” says Jensen.
4. Not taking inflation into account
Underestimating inflation can similarly jeopardize a person’s financial health.
When considering how much to set aside for retirement, a person must also consider the current cost of products versus their future cost.
“Inflation can be unpredictable, but I tell people to look at the price of a liter of milk over time to get a rough idea.”
5. Sit on your treasure
Some people see they’ve saved a million dollars for retirement and “go crazy,” points out the financial planner.
Conversely, other people are so used to saving that they hesitate to use their hard-earned money.
“These people are often anxious and unable to enjoy their retirement because they are too preoccupied with money,” says Jensen.
He advises to continually re-evaluate your budget and your expenses in order to reduce the anxiety associated with financial uncertainty.
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