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Not Saving for Retirement
Retirement savings is one of the easiest things in the world to put off and many people do just that, but this can be a long term financial mistake for many reasons:
First, you get a tax break on IRAs and 401ks. This is a huge investment advantage as you get to invest your money without paying taxes. Yes, you will pay taxes later, but at a, hopefully, lower rate, plus you get to have years of income in your 401k on those pre-tax earnings.
Second many people get matching funds or stock on 401k from their company. Not taking advantage of this can be like throwing away free money.
Third, you miss out on all the growth. This was mentioned in reason number 1, but it's key. If you save $1000 on taxes now, depending on your age, that $1000 is going to be earning money and growing for many years to come. This compounded growth over years of investing can be a key to having a nice retirement.
Not only does the initial money investment you put in grow, but it grows tax free and so does any employer matching funds. If you invest early in life, then your retirement savings can have years and years to grow. All these advantages make retirement savings a big deal. Don't count on Social Security or even a pension plan funding your entire retirement. You need to invest now and start retirement savings today. Not doing so can be a big financial mistake. Also, it's really never too late to start saving for retirement. The government has retirement saving catch-up plans for those starting later. The key is to start saving now!
If you don't have a 401k, or something like it, through your company you can do an IRA on your own. Financial advisors can help you with this. One thing to be sure to avoid is putting in too much. There are max limits and these can change per your income as well. So be sure to look into the tax laws or get your financial advisor or tax person to help you out.
Note: always consult your professional financial advisor. The advice on this page is just opinion and you should consult a professional before making any financial decisions.
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