5 Retirement Mistakes That Could Cost You Millions
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When it comes to retirement, there's a few mistakes people make that cause them to miss out on a ton of money. We're talking millions. And you might be making one of these silly little million dollar mistakes right now without even realizing it. Well, that's terrifying. So keep watching unless you want to be slinging some crispy thighs at the KFC when you're 86, which...

By the way, totally normal age to still be working if you need the money. One man's opinion. In today's video, we'll cover five huge retirement stakes to avoid, and you'll learn a better way to invest with no regrets. But before we jump in, hit those like and subscribe buttons and share this video with someone in your life whose retirement plan actually is working at the KFC all the way up until they kick the bucket.

The 12 piece extra crispy, if I had to guess. - That's elder abuse. - All right, the first huge retirement mistake people make is probably the biggest one of all. And that is not planning for retirement.

According to the Fed, 25% of non-retired Americans have $0 in any kind of retirement account. That's not great. And on top of that, research done by Ramsey Solutions found that 48% of Americans have less than 10 grand saved for retirement. That'll last you about three months if you're lucky and if you don't buy too many Alan Jackson CDs at Cracker Barrel. I'm sorry, I just couldn't help myself. Oh,

Oh, and if your idea of a retirement plan is just counting on Social Security to get by, good luck with that. According to the Social Security website, the average monthly benefit in 2023 was around $1,700 a month. That's approaching the poverty line. And by the way, that's the average. Some people get less than $900 a month. And here's another depressing stat. About half of workers haven't even calculated what they need to live in retirement. That's harder to swallow than the baguette at Panera. Why?

Why are those things built for tough? There's no reason. Let me chew. Aren't baguettes supposed to be tough? It's a good thing. But guess what? You don't have to be one of those people. We've got a free tool that can help you figure out exactly how much you'll need to retire and how much you'll need to save each month to reach the goal. I'll drop a link below if you want to check it out. Okay, the next retirement mistake on our list is another biggie, and it has to do with compound growth.

And that mistake is not investing early enough. Get this, in most retirement accounts, around 80 to 90% of the balance is growth when you get to retirement age. Only 10 to 20% was the money that you put in. And as my Gen Z friends say,

That's on growth. And in this case, compound growth, which is when your money makes money and the money that money makes makes more money. But that takes time. So start investing as soon as you're financially ready. Now, if you're in your 40s or 50s and you haven't started yet, you might be feeling like it's too late. Just like it's too late for me to unsee Ingrid Andress's rendition of the national anthem. Move the

Way to kick America while she's down, Ingrid. Also, seriously, best of luck in rehab. Wishing you the best. But here's the deal. No matter how close you are to retiring, there's still time to grow your retirement savings if you make it a priority. Let's say you turn 40 this year and you bring home around four grand a month. By investing 15% of your income until you retire, you could end up with a nest egg worth close to $1.2 million. Now, if you're older than that, you're going to need to up the percentage a bit.

For example, if you're 50 and you contribute 25% of your income toward retirement until you're 67, you could have around 600 grand. Now that's not a million, but it's way better than zero. So no matter how old you are or how much you've saved so far, you can still do something. Remember, the secret sauce here is your savings rate, how much you put away each month, plus time. So consider this your wake-up call and start putting your money to work.

The next retirement mistake people make is similar to the last one, but instead of getting started too late, they are retiring hashtag too soon. Now, this could affect you in a couple ways. Number one, if you're not yet 59 and a half, you'll have to pay penalties on the money you withdraw from your retirement accounts. Number two, and this is the big one, you could be missing out on some incredible compound growth.

Here's an example. Imagine a young couple in their 30s. Let's call them Jack and Diane. Named, of course, after two of the greatest actors of the 20th century, Jack Nicholson and Diane Keaton. At age 35, they begin investing 15% of their income in their company 401ks. Their combined household income is 71 grand, which is actually below the median household income in America today. So don't at me. These are real numbers. So that 15% comes out to just under 890 bucks per month.

Well, check out what that turns into over time when invested consistently. Even without an employer match and never getting a raise, assuming a 10% rate of return, which is the historical track record of the stock market, not my opinion, they would have just under $2.5 million by the time they retire at age 67. But look what happens if they retire even just five years early at age 62. Their nest egg would be just under $1.5 million.

So that extra five years makes a huge difference. In this case, about a million dollars worth of difference. And that's a lot of money for two American kids growing up in the heartland sucking on a chili dog outside the Tasty Freeze. ♪ Diane says baby, you ain't missing nothing ♪ Now look, if you wanna retire early and you have enough money to do it, that's great. Just make sure you know what you're giving up because working a few more years could be a really smart move. Because life goes on long after the thrill of your 401K balance is gone.

Okay, I'll stop. For now. Life goes on. Mellencamp, man. Don't know any other songs by that guy, but don't need to.

All right, the next huge retirement mistake on our list is so easy to make because there's so many ways to make it. And that is investing in the wrong things. There are all kinds of terrible investments out there. Crypto, NFTs, single stocks, day trading, investing apps, micro-investing, annuities, bonds, CDs, precious metals, gambling, sports betting, and leveraged real estate, just to name a few. Now, to be clear, these are not all bad things per se. There may be a time and place where you utilize a few of these things.

but some of them are as problematic as the lyrics to Jack and Diane.

As a general rule, stay away from things offering poor returns and things with way too much risk. Sure, there's never zero risk when it comes to investing, but there is a way to do it with wisdom and with more peace and less stress. And guess what? All you need are the good old boring retirement accounts like a company 401k and a Roth IRA. So as soon as you're financially ready to invest, start putting 15% of your income into these tax advantaged accounts and then sit back and watch your nest egg grow over time. Thanks, Compound Growth.

Once you're maxing out your retirement accounts, you can move on to other investments like paid for real estate or index funds in a non-retirement account. But retirement accounts are really all you need to build some serious wealth. Now, before we get to the next mistake involving your investments, let's talk about your savings.

If you're stacking cash for a vacation or down payment on a house, you might as well be earning some good interest on that money. And a great place to do that is a high-yield savings account like the one offered by Laurel Road, one of the sponsors of today's video. Right now, your account balance earns 5.15% APY, plus a bunch of other great perks. No minimum balance required to open an account, your deposits are FDIC-insured, and there's no sneaky monthly maintenance fees. And if you need to talk to a real human being, Laurel Road's premium care team will take great care, scratch that,

premium care of you. So make your money make more money by going to laurelroad.com/george or just click the link in the description. This video is also sponsored by Delete.me. You know all those weird shady sites that sell your personal info for a profit? Well, Delete.me finds and removes your info from hundreds of those data broker websites

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Even if you're investing 15% of your income in tax-advantaged retirement accounts, you could still be making this next mistake. And that is not diversifying your investments. Now, to be clear, I'm talking about diversifying within your retirement account. Remember, a retirement account is just an empty tax-advantaged shell. You've got to choose investments to purchase inside of it. Now, sometimes people get overwhelmed and confused at this point because of all the options that are out there.

Like when you're at Sonic and you can't decide between a dirty Dr. Pepper slush and a twisted flamingo with a Red Bull charger. Side note. America, are you okay? Like, how are we doing? Like, when did we get to that point where we were like, yeah, throw some nerds in there. I'm doing fine. I'm having a great day. I just really want Red Bull with alcohol. Like, when did we get to that? I want to know. Keep me posted in the comments how we're all doing. Not great. Not great.

Anyway, allow me to free you from paralysis by analysis. The only type of investment you need to build wealth is mutual funds. A mutual fund pulls together money from a bunch of investors, like you, to buy a diverse range of stocks in different companies. So if one stock doesn't work out, no problemo. You get plenty of others to balance it out. We're talking like 90 to 200 stocks within one mutual fund.

Look for growth stock mutual funds with long track records. These are funds that focus on companies expected to have above average growth. Now, they may be more volatile in the short term, but they also have the potential for higher returns over the long haul, making them a great option for retirement investing. And to add one more layer of risk reduction, it is wise to diversify evenly across these four different types of mutual funds. Growth and income funds, growth funds, aggressive growth funds, and international funds.

So you would allocate 25% of your investment to each type of fund. Now, this is the same exact portfolio that I have in my retirement account, that Dave Ramsey has in his retirement account, and that plenty of other millionaires have in theirs. Because when it comes down to it, none of us can accurately predict the markets. In fact, when we studied millionaires, we found that most of them are average investors at best, not prodigies. And that gives me hope that even an average George or Jack or Diane or Larry slash Jasmine can do this stuff too.

It's the simple, proven method to build wealth without stress. So if you want to get a gauge on how you're doing with your retirement savings, be sure to check out this video to find out how much should be in your 401k by age and what you can do to catch up if you're behind. I'll also link it below in the description. And don't forget to like, subscribe, and share this with your friends who think an employer match is when you show up to work wearing the same thing as your boss. Probably good for them to see this video. Thanks for watching. See you next time.