5 Bad Habits That Are Affecting Your Retirement Savings

Some Americans are not so optimistic when it comes to retirement. A June survey by the New York Life insurance company said only 31% are confident their savings will last long enough to cover their needs in retirement.

The current inflation, plus the efforts of the Federal Reserve to control the situation and the contraction of the economy for the second consecutive month has made Americans prioritize short-term financial concerns over long-term ones. They have even begun to withdraw money from their savings to deal with the situation, says another survey from the same company.

For those who are saving for retirement, the road is not easy, and if we add some negative habits, things can get even more complicated.

1. They choose to spend rather than save

Arete Wealth Management agency financial planner Erick Olson told finance site GoBankingRates that it’s easier to focus on the present than to think about the future. If you look at your spending, you can likely find ways to set aside more money for tomorrow, such as cutting back on eating out, removing or lowering the cost of cable TV, and doing away with credit card debt.

2. Underestimating the amount needed to retire

Although there are people who have begun to collect money for the goal of retirement they have not bothered to see if the money is enough to live comfortably in this period. There are online calculators, such as the Vanguard Retirement Income Calculator or the Fidelity My Plan Calculator. If you have doubts, you can approach a competent financial planner.

3. Diversify the portfolio

Many people do not usually understand this, but doing so can make a difference. Spreading your money across the top 10 mutual funds could have a better impact than just investing in one. Reviewing the histories and their performances is a good way to make sure that your money is in good hands.

4. Do not consider emergencies

If you’re funneling all of your savings into a retirement account, but haven’t set aside money for emergencies, you could be putting your retirement savings at risk. If you lose a job, can’t work due to illness, or have an unexpected expense, you may have to raid your retirement account.

5. Put more money into a house or car

If you have a car or a house, you probably have a habit of making payments for them. In case you have to pay more to buy a house or a car than you can afford, You probably don’t have enough room in your budget to consider saving for retirement. Downsizing to a less expensive home or opting for a used car that you can buy without financing could provide some respite.

It may interest you:
– Why many workers in the US are not saving money for retirement: 3 main reasons
– What is Biden’s plan to protect the retirement of millions of Americans
-Americans will pay more and more for retirement, according to study