Managing Your Money

Don't Retire Poor -- Avoid These 10 Pitfalls

 

8. Failing to take advantage of IRAs: You should be taking advantage of IRAs from the day that you are able to. If you fail to do so, it can be a huge blow to your retirement savings, since there is a limited amount that can be invested each year. IRAs are set up specifically so that you can maximize the amount that you have when you retire, and if you forgo them in your early years, you will do great damage to the amount available in your retirement fund when you get older.

9. Investing too conservatively: Investing too conservatively in your retirement fund means that you will not grow it adequately to meet your needs when you retire. You need to take into account that over time, inflation will take part of the purchasing power away from your retirement fund. As you get closer to retirement, you can make your investments more conservative, but in the early years you want to make sure that you are not investing too conservatively to yield the gains you need for retirement.

10. Investing too aggressively: While you don't want to invest too conservatively, you also don't want to be investing in things that promise huge returns but are extremely risky. You should determine a set amount of money each month to put into something like a stock index fund for your retirement. If you can spare more money after you have contributed to the retirement fund, it is acceptable to invest in something a bit more risky. However, you don't want to be risking the main portion of your retirement money in risky investments that could very well leave you with no money in the end.

By keeping these retirement fund pitfalls in mind, you can help ensure that you have plenty in your retirement fund when the time comes.

>To order reprints of this article, click here: Reprints

Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.

TheStreet Premium Services

Jim Cramer
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn More
OptionsProfits
OptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn More
Real Money
Real Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn More
Stocks Under $10
Stocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn More
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
Dow Jones S&P 500 NASDAQ 10-Year Note
12,393.45 1,310.33 2,827.34 15.81
Oil *
101.78
DOWN
26.41
DOWN
2.99
DOWN
10.02
DOWN
0.44
10 Yr
1.58%
SPDR Gold
151.62
-0.21%
-0.23%
-0.35%
-2.71%
Data delayed 20 minutes

Top Stories and Tools

Articles From

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

We respect your privacy.
Podcasts

Connect with TheStreet