Categories: Curiosities

Retirement Investing Mistakes You Should Avoid ASAP

Not taking full advantage of tax breaks

A person’s actual investments can be less important than the types of accounts used for retirement investing. The tax-favorable 401(k) plans and individual retirement accounts, or IRAs, are a huge leg up in getting to retirement because they enable your tax-deferred earnings to compound. Fortunately, most workers with access to 401(k) plans do take advantage of them.

It’s particularly unwise to pass up the opportunity to invest in a plan when your employer matches a portion of your contributions. That’s because you’re passing up free money — the equivalent of refusing a salary increase when it’s offered.

Workers with no access to a company plan should open an IRA, yet few people make IRA contributions – only about 12 percent, according to the Investment Company Institute, an industry trade group. Be the exception to the rule. To make it easy, set it up so that your IRA account gets automatic contributions from each paycheck.

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