First Person: How I Sabotage My Retirement

Yahoo Contributor Network

I have made every mistake in the book when it comes to saving for my retirement, according to some experts.

A recent article published by U.S. News & World Report named 5 ways people sabotage their retirement. I am guilty of all five. Still, I'm managing to make up for lost time.

The article pointed out a study by the Employee Benefit Research Institute which says half of people in the United States report having less than $25,000 put aside in savings.

About a decade ago, I had about $25,000, but I've since tripled that amount.

Putting my children first

The first "mistake" people make that may sabotage their retirement is having children, according to the article. I do put my children first. However, I've observed my single friends with no children spend three times the amount of money I spend on clothing, eating out and other non-essentials. Even though a survey by TD Ameritrade showed people say having children made it more challenging for them to save for retirement, there is no way of knowing they wouldn't have blown their money on vacations or sports cars instead of saving for retirement.

Waiting to save for retirement

I am guilty of waiting to save for retirement until most of my consumer debt was paid off. Experts say people should start saving for retirement as soon as possible. In fact, people who start saving in their 20s have a tremendous advantage. I had to pay off college loans in my 20s. I didn't save for retirement until I was about 30.

Failing to crunch the numbers

I have made a few feeble attempts to calculate a "retirement number," or the amount of income I'll need to retire comfortably. To be frank, it's difficult to know how much I'll need. Most people throw out $1 million as the magical amount a person needs to be wealthy in retirement, but some experts are now saying that figure should be closer to $3 million. Just because I earned $65,000 salary during my peak working years, doesn't mean I'll need to replace 80 percent or more of my income during retirement. I can learn to live on less.

Investing too conservatively

When I first started investing, I had too conservative of an approach. I mostly invested in bonds. After about 5 years, I decided I needed to see better returns on my retirement savings. I switched to all stocks. Experts would say I became too aggressive. Now that I'm almost 40 years old, I've rebalanced my portfolio so that I have a mix of bonds and stocks that reflect my age.

Expecting to die young

I used to anticipate living to about 80, but after studying my genealogy, I've discovered longevity runs in my family. A more realistic age for me could be 95. I have ramped up my retirement savings in the past few years. Instead of saving just 5 percent of my salary for my 401(k), I have increased it to 15 percent.

One mistake I won't make when it comes to my retirement planning is retiring early. I've seen too many people retire at 62 and then struggle to live on their reduced social security income for life. I'll keep working for as long as I'm still ticking.

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More from this contributor:

Is It Possible to Save Too Much for Retirement?

How Much We Need to Retire as a Couple

Seeing my future self as a Millionaire

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