Do Start Early
Starting retirement planning early has many benefits. A survey showed that people who start saving for retirement in their 20s are 66% more likely to retire before age 60 compared to those that begin saving in their 30s.
Do Know Your Risk Tolerance
Just like people want to do different things in their retirement, they also have different levels of risk tolerance. Each person’s risk profile depends on their wealth, income, and how far they are from the expected retirement age. For instance, the type of stocks found in a 20-something’s portfolio might not be ideal for someone at age 55. Therefore, before deciding on what to put in your retirement portfolio, always make sure you know how much you can afford to lose.
Don’t Put All Your Eggs in One Basket
We have all heard of this line before, but it is still worth mentioning. Sometimes an investment opportunity can look so attractive that you don’t think there’s a chance of losing money, and you just want to put all your money into it. This is when you should remind yourself not to put all your eggs in one basket.
Speculating another big retirement planning mistake. Everyone loves triple-digit returns, and it’s always exciting to bet on “the next big thing.” But to get those returns, it almost always requires taking a substantial amount of risk.
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