Here’s the main thing people get wrong about retirement.
Transcript:
Suze Orman: You know, a lot of people think that retirement is simply you need money in order to pay your bills. That’s not what’s happening here. When you retire. Working gives you validation of who you are. So I think people make a big mistake in that they retire and they just figure out their retirement in terms of we have this much money and this is the income we’re going to get. But they don’t understand that retirement is a whole lot more than that. And then they start to feel bad about what they’re doing. They also don’t stand in terms of that. You actually spend more money in retirement than you did when you were working, because when you’re retired, you eat out more. You go to see your kids more, you want to take more vacations. So I don’t think they quite estimate everything the way that they should. And they don’t really prepare for illness either. If you take social security at 62 or before your full retirement age, in my opinion, you are making the biggest mistake out there because you’re not compounding it. You’re not letting it grow. You need to just let it be. And for those of you who can, you should wait till you are 70. Now, those ages may change, but if you’re currently about to retire or thinking about it, full retirement age minimum or at least 70. If you can. If you have a 401k, great. Especially if your employer matches. But if you don’t have a Roth 401k and you are contributing simply to a traditional 401k, which is pre-tax, you are making the biggest mistake ever. You need to go Roth all the way. And besides a Roth 401k or 403b or teaspoon, you can also have a Roth IRA if you qualify for it income wise. So the biggest mistake you will be making is getting a tax write off now for your contributions to your retirement account and seriously pay for it later on. Big, big mistake.
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