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Money 3 choices you're making today that could derail your retirement tomorrow

23:15  19 february  2020
23:15  19 february  2020 Source:   msn.com

Day contemplated retirement due to back injury

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The choices we make today have a big impact on the options we have tomorrow . There's no instance where that's clearer than in retirement savings. Getting divorced, carrying consumer debt, and waiting until student loans are paid off to start saving for retirement can have a major effect on when you

But there are steps you can take, starting today . There are many factors that can derail your future if you don’t address them in advance, including If you ’ re making minimum payments on credit cards while you ’ re working, it’s going to be even more difficult to pay down those bills when your paychecks

The choices we make today have a big impact on the options we have tomorrow. There's no instance where that's clearer than in retirement savings.

Getting divorced, carrying consumer debt, and waiting until student loans are paid off to start saving for retirement can have a major effect on when you can retire, and how much you'll have to live off when you do.

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That doesn't mean you're doomed if you've made, or are in the process of making, one or more of these choices. It just means you might have to pay some extra attention to your retirement savings now and in the future to make up for any ground lost.

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Maybe you ' re planning to spend your retirement playing golf or traveling the world. But if a financial crisis derails your retirement , you'll have to You could run out of savings pretty quickly if you have to help your adult children pay for expenses like utilities or groceries for an extended period of

Is it when you ' re at work or when you have a leisurely day off? Now consider that your retirement will be more like your Sunday than your Monday. “If you are saving 30% of your income today , then living off 70% in retirement may make perfect sense for you,” says Ellen Derrick, a Certified Financial

1. Divorce can destroy your retirement savings

Divorce impacts all facets of your finances, but it can hit your retirement savings especially hard.

Retirement accounts can be divided during divorce in some states. They can be considered community property, or an asset that is split in half upon divorce. No matter which partner did the majority of the saving, your retirement accounts may be divided equally, depending on where you live. Additionally, other expenses can eat away at your ability to save, such as spousal support.

After a divorce, it's important to start rebuilding and re-examining your retirement plan as soon as you can. "It's extremely important to start out not with implementing advice, but to start out with analysis," Financial planner Ylisa Sanford previously told Business Insider. "That really needs to be asking yourself, 'What is my new normal? What does my new life look like? And, where do I want to be?'"

More than half of Canadians fear not having enough for retirement, says poll

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Retirement myths are another story altogether. That's why it's important to avoid being misled by the growing number of myths that cloud the difficult Reality: While it's possible that you 'll be in a lower tax bracket because you 'll be making less, a more likely scenario is that you 'll pay a higher percentage

G. If you make Russian friends, you may get invited to their dacha and see the beautiful winter countryside outside Moscow. Due to its revolutionary use of different styles of music, critics claim that “Hamilton” is making musical history. Hamilton’s story is told primarily through hip-hop music, but also

Once you've done that, she said, you might want to consider finding a financial planner who can help you start to make a plan that works for your new circumstances.

2. Holding on to consumer debt can be costly

While getting out of debt can be tough, it will be even harder to save for retirement with monthly debt payments in the way.

Personal finance site Kiplinger and wealth management company Personal Capital surveyed 850 Americans on the factors keeping them from saving as much as they'd like for retirement. Of those surveyed, 21.3% said that consumer debt - such as credit card debt, medical debt, and auto loans, but not including student loans - have prevented them from reaching their savings goals.

Consumer debt comes with high interest rates, which makes it one of the most expensive forms of debt. For example, the average interest rate on a credit card is about 17%. Holding this kind of debt for the long term can make it more difficult to retire when the time comes, which is why you'll want to prioritize paying it off as soon as possible using a strategy like the debt snowball or debt avalanche.

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The people you ’ re around are your choice , so if you ’ re keeping company that lacks compassion Your past can tell you a lot about your present conditions, and your present actions can help you see into Stop putting everything off for tomorrow , as you never know how many of those you will have.

You do the best you can to make the right ones along the way but so many things can distract or derail you . Some wayward decisions won't amount to much more than learning Here are three corrosive choices to avoid, as doing the opposite is certain to lead to greater career and life success.

Financial planner Ryan Cole of Citrine Capital previously told Business Insider that while he generally advises allocating money to pay off debt and save for retirement at the same time, he also recommends prioritizing any debt with an interest rate over 9% before saving for retirement. "While it may be tempting to save for retirement while you have high-interest debt, doing so can often do more harm than good," he said.

3. Waiting until your student loans are paid off misses growth opportunities

When set against consumer debt, student loan debt tends to be comparatively cheap. That's why many experts recommend tackling student loan debt and saving for retirement at the same time.

Though student loans can eat up a large chunk of an entry-level salary (the average student loan payment in the US in June 2019 was $393 per month), it's still important to save what you can for retirement early in your career. Even small amounts can see big growth with the power of compound interest, where the interest you earn then earns interest on itself.

Over the many years retirement savings have to grow, compound interest can affect even small amounts. Business Insider's Tanza Loudenback calculated the difference between starting to save for retirement at age 25 and age 35, and found that a 10-year difference makes a big impact - potentially to the tune of tens of thousands of dollars.

This is why you should never paint your house a dark colour

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Generally, the advice is to make the minimum payment on your student loans (if your interest rates aren't too high; otherwise you might consider refinancing for a lower rate), and then save what you can for retirement - allowing you to get the benefit of saving sooner while still chipping away at loans.

  3 choices you're making today that could derail your retirement tomorrow © Erics Photography / Getty Images

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74% of Canadians Are Making This Big Mistake About Their Savings .
Save more now, so you can save less later! Now's the perfect time to save and invest for your retirement because of the stock market correction.The poll also found that “while over half of Canadians cite saving for retirement (56%) and a rainy day (53%) as their top financial priorities, what they manage to save for either is falling well short of their intentions.

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