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Minor IRA Mistakes That Could Have Major Impact Part Two

IRA mistakes 2

Check out part one here!

Tapping into your retirement funds before retirement

As you get older, and subsequently, as your retirement account grows, it can be awfully tempting to borrow that money from your retirement account. Unless there’s need for active participation in your retirement account (i.e. a self-directed IRA), the best thing you can do for your future self, is to pretend that that money doesn’t exist, and just let it grow.

Not being strict with yourself on your contributions

Not meeting your annual maximum contribution limit, especially if you’re lucky enough to have a matching program, is like seeing money on the street, and not picking it up. The power of compound interest is underestimated by a lot of savers. It’s definitely tempting to keep that extra $100 for yourself, and spend it on concert tickets instead of your retirement account, but setting strict rules and goals for yourself will only benefit you in the long run. You’ll never think, “I wish I hadn’t saved this much money”.

Cashing your 401K instead of rolling it into another retirement account

If you’re just getting started on your savings, and you don’t feel like you have “enough” money to justify rolling your 401K over into an IRA, then that’s just silly. If you leave your job, and you have a couple grand in your 401K, you will, I repeat, you will want to take that cash for yourself. The thing is though, you’re hurting yourself in multiple ways.