When you are in your 40s, you most likely have some sort of savings and investments in your accounts. Or so we hope. Here are 3 most common mistakes you should avoid to make sure you are well on your way to a comfortable retirement:
Giving Up on Retirement Savings: You were advised to start saving for retirement a long time ago, but somehow you didn’t get to do anything about it. You check your accounts and realize you have no substantial savings or investments that can cushion your retirement years.
Do not despair. It’s always not too late to start saving and investing. You are playing catch-up now, so make sure you maximize your retirement accounts and put more money towards investments each year.
You might not end up with a huge retirement fund, but you will still have a healthy nest egg if you start now.
Not Reviewing Mortgage Interest Rates: When you are in your 40s, you may have been paying for mortgage for so many years that it becomes a second nature for you. Mortgage repayment is always there in your monthly budget and you don’t even bother thinking about it.
Don’t. This might be a good time to review your mortgage repayment plan and refinance if the prevalent rate is lower than what you have. Talk to your banker or financial advisor to see if it makes sense to refinance your mortgage. You may be able to slash tens of thousands of dollars off your mortgage and put more into your investment for a bigger retirement nest egg.
Not Having a Will if You Have Kids: You may feel it’s too early to think about setting up a will at this stage, but if you are have young kids, getting a will is more than necessary. Your will allows you to name a guardian for your children in the event of your death, and it also decides how your wealth is getting distributed to your designated beneficiaries. It helps to clear up confusions of your loved ones if something were to happen to you.
We continue next week with mistakes you make in your 50s.
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