5 Ways to Ruin Your Retirement

retirement nest eggWith the economy in the way that it is, many people have had to rethink the way that they feel about retirement, and many have had to start completely over. Making mistakes in your retirement plan can definitely happen, and things don’t always go by plan.

Retirement may be very far away for you, or maybe you’re planning on it starting just next year. Either way, you might want to have some sort of plan to prepare yourself.

Possibly ways that you can ruin your retirement plan:


1. Not Having a Goal

Not having any goal whatsoever might not be the best idea. You should always have some kind of goal to be striving for right? When will you retire? Where will you retire? Will you work part-time while in retirement or travel the world? There are many questions to ask yourself. If you have a spouse, then it’s probably a good idea to have some sort of mutual agreement as to what will happen as well in retirement.

Retirement for me is a long time from now since I am only 23, but I do have some goals generally in mind. I would like to retire somewhat younger (not 65) and I want to have a reliable passive income. It all comes down to happiness and what I feel comfortable with though, and that can all change.


2. Not Having Plan B

Your retirement plan will most like not go by plan at all (you will be lucky if it goes exactly by your plan) and you should try and have some sort of alternate plan just in case something does happen. If you are approaching retirement, then you should definitely have a second plan as you have more at stake.

Many things can derail your retirement, such as an early forced retirement due to a layoff or firing, a serious injury which prevents you from working and so on. The possibilities are endless, but with good planning and back up plans, then you can be more prepared if something does happen.


3. Lifestyle Inflation

Lifestyle inflation is when you increase your spending due to a raise. So when you make more money, you might buy a nicer car to match how much money you are making. This isn’t always a bad thing because I am a true believer in still having fun while you have money (can’t just work yourself to death), but you should also have a plan.

If you are always spending all of this extra money instead of saving at least a little bit of it, then are you ever actually getting ahead? You should be saving a certain percentage of each increase in your paychecks.


4. Underestimating How Long You Will Live

People are living longer and longer nowadays. Thinking that you’ll only live to 80 or 85 years old is probably not the best idea. You should be striving to save more money than that, as there have been many reports that today’s younger generations are expected to live until they are around 95 to 100 years old on average.


5. Not Being Diversified

Are all of your eggs in one basket? If you lost your retirement and any dividend payments when you’re older, then what would your back-up plan be then?

When I retire, the thing I will strive for is to have no debt. That way I don’t have to rely on future retirement income to pay off current debts. I will also aim for some sort of passive income while in retirement, or fulfill any dreams of a fun part-time job when I’m older.


Are you on track with your retirement?

What ways could you possibly derail it?

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  1. I like your take on things… there are so many posts about with reasons WHY you should save, but you have listed some good consequences of NOT saving… hopefully this will hit a nerve for some folk

  2. Great post!

  3. What about not starting? I know so many people in their 40 & 50s who thought putting $50 per check was enough to fund their retirement. Lack of education is another way to ruin it. I think a lot of people are scared of goals.

  4. I am happy to say that I am currently on track when it comes to my retirement plans. A few years ago, my wife and I came up with a financial road map to get our plans on track. I think the main issue people have is no plan, starting too late and living too long. All things that can be alleviated with a little planning.


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