Money Talks News: Why people retire poor - News, Weather, Sports, Toledo, OH

Money Talks News: Why people retire poor

(Source: Money Talks News) (Source: Money Talks News)
Money Talks News -

According to the Employee Benefit Research Institute, 4 out of 10 American workers aren't confident they'll have a comfortable retirement.

There are simple mistakes you can avoid while you're working, especially when you're young, to ensure that you don't end up poor when you retire.

The first mistake to avoid is thinking you can both look rich and be rich. Living above your means is the primary reason people with adequate income often end up poor.

Mistake number two: Not saving early enough. If you can save just $10 a day, and earn 8 percent on it, over 40 years you'll accumulate nearly a million bucks. Because of compounding, small and soon beats large and later.

Third best way to end up poor? Pay interest. Adding interest onto what you pay for things can double, or even triple their price. That's not the road to riches.

The only times you should borrow money? When your back's against the wall or when what you're buying is going to go up in value by more than what you're paying in interest.

And speaking of borrowing, when you have to borrow big, like for a mortgage, having bad credit means paying thousands more. That's money that could have made you richer.

Then there's planning. Not taking advantage of retirement plans at work means paying more in taxes, having less for retirement and maybe missing matching money.

Some people, even with an adequate income, are going to retire poor when they didn't have to. Don't be one of those people. To learn more on how you can be proactive for your retirement funds, head to the Money Talks News website and do a search for "Retirement."

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