Not saving enough for retirement is still the top vulnerability of most employees. Only 18% know they are on track to reach their income goal in retirement, and the national average savings rate is only about 4%, well below the 10-15% financial planners typically recommend saving for retirement.
Why is this the case? It seems one of the biggest problems is that many Americans are still struggling with basic money management. Most employees do not have an emergency fund, 42% are uncomfortable with the amount of debt they have, and 1/3 don’t have enough of a handle on their cash flow to spend less than they make each month. It’s hard to save adequately for retirement when you’re living paycheck to paycheck and struggling with debt.
Unlike many financial planners who only deal with the investment portfolios of high-net-worth clients, we regularly help people with these basic financial issues. As a result, just like with the retirement myths, we’ve noticed some common mistakes among people of all income levels that could be hurting their ability to manage their day-to-day finances and save for their longer term goals. Here are 10.
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