Even Responsible Savers Can Make Mistakes

It might sound a bit counter-intuitive but saving might also get you in trouble once you reach that next chapter. Even for people who have been very responsible with their money over the years, entering retirement can still be a challenge because it’s such a different stage of life.

Having the ability to save aggressively and stick to that disciplined approach is a tremendous skill to have and one that will put you ahead of the curve for retirement.

It might sound a bit counter-intuitive but saving might also get you in trouble once you reach that next chapter. Even for people who have been very responsible with their money over the years, entering retirement can still be a challenge because it’s such a different stage of life.

While we’ll never discourage saving money, we would like to point out some mistakes that savers make so that you can protect everything you’ve worked so hard to build.

Cash may be king, but it isn’t God.

If saving comes naturally for you, you might end up with too much money just sitting in the bank collecting dust. It’s important to have enough in cash, but don’t worship at the altar of a huge savings account. There’s almost always a better use for that money.

Don’t out-save your risk meter.

Some people save so aggressively that their risk meter is broken. Even when the market is down, they barely notice because they’re constantly adding so much to their accounts that their balance doesn’t seem to take a huge hit. But eventually you won’t be able to save so aggressively. Then what?

Defuse your tax time bomb.

Saving in retirement accounts is nice when it’s reducing your taxable income during your earning years. But keep in mind that you’re just delaying those taxes and building a tax time bomb for yourself. Fortunately, there are strategies to help you defuse that bomb.

Live a little.

If you’ve spent the majority of your life saving diligently, you can lose sight of why you saved that money to begin with. At some point, you should enjoy that money instead of just saving forever because that’s the only thing you know how to do.

Each of these areas are communicated to our clients as we go through the comprehensive planning process and understanding that shift in mindset will allow you to make the most out of those savings you’ve built.

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