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We may love to dream and fantasize about our retirement, but we usually don’t look forward to the retirement planning. Thinking about a long-term goal like retirement can be overwhelming, but it can also be inspiring. Sometimes knowing what we are working toward can help motivate us to establish healthy financial habits and get there. The goal is to balance the life you want now with the life you want in the future. No matter what stage in your retirement planning you have reached, it’s a good idea to avoid these common financial missteps that can get in the way of your retirement goals

1. Waiting to Begin

You’ve definitely heard this one before but it’s worth mentioning again. When you look at how much you need to save for retirement, you may feel like you’ll never reach that number, but it is always smart to start saving. The sooner you start, the more likely you will have enough savings to retire as planned or even early. You will amass the money you are saving but also benefit from compounding interest, where the interest on the money you contribute now will also earn interest. This means you can reach that goal number by contributing less money.

2. Living Too Large

There are actually two ways that living too large can impact your retirement. Living too large pre-retirement, or living beyond your means, can delay or impede your retirement. Living too large after retirement can cause you to run out of money. Most experts recommend assuming you will need 70% to 90% of your pre-retirement income. This varies depending on the kind of retirement you envision. One full of travel and activities will likely cost more than one spent on hobbies in the home. Also, spending in retirement isn’t always uniform — you may spend more in those first few years after leaving your job than you do later, when you’ve established a retirement routine. But even in retirement it’s important to have a budget to make sure you aren’t spending so much that you will run through your nest egg.

3. Cashing Out on Savings Early

Whether you are switching jobs or have run into financial trouble, it may seem easy to take money out of your current retirement plan. However, withdrawing from a 401(k) depletes your retirement savings and can cost you not only hefty taxes but also an early withdrawal penalty — which is commonly 10%. If you switch jobs, consider rolling over your savings into an individual retirement account or other tax-advantaged plan to continue to grow your savings.

4. Counting on Your Spouse’s Retirement

If you are married and hoping your spouse’s retirement plan will cover all your bases, you could be cutting your potential savings in half and missing out on a possible employer match. It’s a good idea for both spouses to grow their own retirement savings. This is true even if one of you is self-employed or a stay-at-home parent.

5. Not Updating Your Plan

Markets, income and expenses all change over time, so it is important to revisit your retirement plan every few years to re-evaluate the best way for you to save for retirement. Be sure that your retirement plan is based on your relevant lifestyle and finances. Adjustments should be made as your life changes, such as if you get a raise or marry. In addition, checking your plan every three to five years can help you stay in check (and even more often as you near retirement).

It’s never too early to plan and manage your retirement, even if your needs and wants eventually change. If you are guilty of these common missteps, you can still get back on the right savings track.

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