401KO'd: In the midst of retirement, are you running low on money·

Posted By: Matt in Taxes on 02/20/2014 at 09:27:02

You spent your entire career working hard and planning for retirement, stashing away cash and investing in a 401K or IRA so that you're golden years have a silver lining.

But as you're calling it quits and embarking on your post work wonderland, you have to be quick to realize that your yearly salary is no more, and hope that what you have saved is more than enough to live on for the foreseeable future.

But ironically, those who believe they have more than enough money to spend once they retire are the ones who find themselves in a little bit of trouble along the way. The biggest mistake most retirees make is assuming they have enough money to last years, and begin spending haphazardly almost as soon as 5'o clock hits on their final day.

Foolish spending on luxury items like a brand new car, a boat or the ever popular youth inducing motorcycle might sound like quite the goodbye to work gift for yourself but would your savings account, retirement plan or pension think the same thing·

This isn't to suggest that buying yourself something special for 20 or 30 years as part of the workforce isn't recommended, but it wouldn't be wise to take a huge chunk out of everything you have saved.

The money you've worked so hard to save for all those years would be better served to invest. If you're not the right person for the job, that's certainly understandable. You'd be wise to find a financial planner or professional to take your money and make it grow, even after you're done working.

A misconception about retirement is that its a time in your life to spend money and that the saving part is done. That is a terribly flawed thought process; you should still continue to amass assets and steer clear of listening to anyone who doesn't do investments for a living.

That includes to friends and family members, the ones who honestly have your best budgeting interests in mind but also may tell you to spend your cash on one vacation after another or swear by a stock they simply can't live without.

Retirees might feel like they have a little extra in the bank to "play" with, but that could get that same group into some serious hot water if one failed investment or loan turns into one after another.

The safe and simple solution is to stick to what got you to retirement in the first place: a propensity for prudent decisions and spending safely, devoid of recklessness.


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