One of the scariest aspects of life for most retired folks isn’t their personal health, it’s their financial health. Many people lay awake at night worrying about the prospect of not having enough money set aside to remain comfortable in their golden years.
But it doesn’t have to be like this. One of the easiest ways to relieve this tension about retirement spending is not knowing what NOT to spend your money on.
Here’s a list of what you need to avoid spending money on in retirement:
Don’t invest in one area—The biggest tip we can give you is to follow the old adage about not putting all your eggs in one basket. It is a horrible idea to invest in any one company because if that company goes belly-up, then so does your life savings. (Just ask all the folks who put their life savings in Enron in the early 2000s.) The same is true though about not investing in one type of field. For instance, don’t put all of your money in real estate or the stock market. Diversification can be the best strategy when it comes to investing your retirement nest egg.
Don’t invest in something you don’t know about—Let’s face it: the business world (especially when it comes to technology) is changing so fast that most people can’t keep up with it. To that end, don’t invest in a field that you know nothing about. A fool and his money are soon parted and if you invest in a tech start-up without knowing everything about that business model, you are going to be the one quickly parted from your cash.
Take advantage of your employer’s offers—The biggest mistake many people make isn’t how they spend their money, but how they fail to plan for retirement. If your company offers savings plans such as a 401(k), then you absolutely must take advantage of this. Failing to do so is literally like throwing away free money.
Retirement doesn’t have to be a scary proposition, but it also isn’t something you should go running into willy-nilly with no plan for how you are going to manage your money. By doing some careful planning up front, you can ensure that you stay comfortable after you settle down into retirement.