5/4/2011 1:22 PM ET|
5 worst ways to save for retirement
You might end up with a bigger bank account, but you'll be all the poorer for it.
Many of us should be ramping up our efforts to save for retirement. But not all methods of saving money are worth the cost. Here are five retirement saving strategies that could actually leave you worse off in retirement.
Neglecting your health. Never neglect your health in exchange for saving more money. If you aren't healthy, there's really no point in having a bunch of money. When you feel dizzy and tired all the time, watching a bank balance with a bunch of digits is not going to help at all. A big part of a comfortable retirement involves having a healthy body. So consider what you are really sacrificing when you skip preventive care or eat unhealthy food to save a few dollars now.
Saving instead of paying off credit card debt. Whether you should save for retirement or pay off debt is an age-old question. But high-interest credit card debt should always be eliminated first. It doesn't make sense to try earning a modest return while paying 20 percent a year or more for interest.
Saving in ways you can't openly talk about. If you can't comfortably talk about how you are saving money for your retirement, then it might not be worth the cost. It would be difficult to live a comfortable retirement knowing you had to cheat others to obtain it. If you have to steal or scam your way into your millions, you will eventually regret it. You will enjoy your retirement more knowing that you obtained it through honest and legitimate hard work.
Making today miserable. Saving for tomorrow involves accepting the idea of delayed gratification. But while the future is important, you need to have some fun today, too. Don't forget about retirement, but also remember that you have to live a little. Money isn't for hoarding.
Never giving. Practically everyone in our society can afford to give. If money is tight, we can probably afford to donate our time through volunteer work. We are truly lucky to have a hot meal on our table every day and have many luxuries in our lives that we often take for granted. Giving will bring you a lifetime of incredible memories, which is much more meaningful than a few numbers in a bank statement. Retirement planning is an important aspect of our lives. But contributing to a 401k account should never be your No. 1 priority, unless you want to miss out on a lot in life.
This article was reported by David Ning for U.S. News & World Report.
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The last comment about giving or donating is no longer in my retirement planning. I am tired of seeing over 40+ percent of my pay sucked out of my check every week and getting less for it. That money goes to both state and federal governments who can't tighten their belts and continue to spend like there is no tomorrow. Governments who continue to fund social programs that are poorly ran or down right corrupt. I will no longer donate to charities that receive any kind of federal or state monies, they already got some of my money. I pay my fair share, unlike 40 percent of the people in this country who did not pay any taxes last year or received a hand out from the Fed. Instead of standing there with your hands out try standing up and contribute like the the rest of us (and yes, you know who you are!). I pay my fair share, unlike the corporations that side step their fiscal responsibilities, (hey GE, are you listening?!)
You're probably thinking I am a jerk, so be it.
Giving 10% of my income to God is not part of my plan but I liked what everyone else said.
P.S. My pastor skimmed half off of every dollar my group made working fundraisers all summer for a charity group our church was helping. He drove a brand new mini van by the end of the summer while I was driving my left and right foot.
I wasn't aware that god needed any money. Besides that one, I agree with everything you said. I personally donate to animal organizations. But then again I am a cynic. You couldn't pay me to donate to human charities. Humans always have a way of biting you in the a$$
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