Yes, you only live once, but that doesn’t mean you should risk your future by living life on the edge without a financial plan. According to Fidelity, you should save at least 10 times your preretirement income by age 67 to live a comfortable retirement lifestyle. So if you’re nearing retirement age but are nowhere near that goal, it may be time to reexamine your priorities.
Find Out: The Money You Need To Save Monthly To Retire Comfortably in Every State
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GOBankingRates talked with Melanie Musson, an insurance expert with Clearsurance.com, who shared some of the mistakes she made when she was younger that delayed her retirement savings progress — and how she course-corrected to set herself on a more secure path.
Musson explained that in her early years, every penny went toward making ends meet, leaving nothing for long-term savings. “I didn’t have money left over to save. I spent every bit of my paycheck and hoped to avoid going into credit card debt,” she said. “Even though it seemed impossible to start saving for retirement, I wish I had gone without so I could put more away.”
She said she course-corrected when she started automatically putting money into retirement accounts. “It was impossible to end the month with money to invest, yet somehow, when the money came out of the paycheck before I even saw it, I managed to live on what was left,” she said.
Looking back, Musson mentioned that automating her savings not only simplified her financial routine but also built a steady habit of putting money away. She now believes that starting early — even with a small amount — can transform your financial future since it lets you take full advantage of compound growth over time.
If you recognize this pattern in your own finances, now is the time to change. Automate your savings and start small. Even the smallest contribution can grow over time.
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Musson admitted that she made another big mistake early on by not fully understanding her options.
“I didn’t really understand the difference between a Roth IRA vs. a traditional IRA. And to be honest, I didn’t want to take the time to figure it out,” she said. “I wish I had started with Roth IRAs, but I didn’t. Now, I use both, depending on which tax bracket I’m in and considering my age.”
With a traditional IRA, contributions are tax-deductible and can offer immediate tax benefits, whereas Roth IRA contributions aren’t tax-deductible but provide tax-free growth and withdrawals in retirement.