retirement

7 retirement investing mistakes

Retirement » 7 Retirement Investing Mistakes

Not taking full advantage of tax breaks
Not taking full advantage of tax breaks © NAN728/Shutterstock.com

It's somewhat counterintuitive, but a person's actual investments can be less important than the types of accounts used for investing for retirement. The tax-favorable 401(k) plans and individual retirement accounts, or IRAs, are a huge leg up in getting to retirement because they enable your tax-deferred earnings to compound. In addition, with traditional plans you generally get an immediate tax break on your taxable income each year you contribute.

At any point in time, less than one-half of the full-time, private-sector workforce has access to a workplace retirement plan, says Anthony Webb, a senior research economist at the Center for Retirement Research at Boston College. Of those who do have access to a workplace plan, about 20 percent choose not to enroll, he adds.

It's especially foolhardy to pass up the opportunity to invest in a plan when your employer matches a portion of your contributions. That's because you're passing up free money -- the equivalent of refusing a salary increase when it's offered.

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed, 0 point 4.32%  0.06 4.26%
15 year fixed, 0 point 3.36%  0.09 3.27%
5/1 ARM 3.37%  0.10 3.27%
 
View Rates in your area Search
Product Rate Change Last week
30K FICO-based HELOC 4.74%  0.01 4.75%
50K FICO-based HELOC 4.51%  0.01 4.50%
100K FICO-based HELOC 4.24% --0.00 4.24%
 
View Rates in your area Search
Product Rate Change Last week
60 month used car loan 2.86%  0.20 3.06%
48 month used car loan 2.79%  0.40 3.19%
60 month new car loan 2.94%  0.10 2.84%
 
View Rates in your area Search
Product Rate Change Last week
1 Year CD 0.90%  0.02 0.88%
2 Year CD 1.02%  0.01 1.03%
5 Year CD 1.59%  0.01 1.60%
 
View Rates in your area Search
Product Rate Change Last week
Balance Transfer Cards 15.71%  0.01 15.70%
Cash Back Cards 16.36% --0.00 16.36%
Low Interest Cards 10.91% --0.00 10.91%
 
Search
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Blog

Jennie Phipps

Contemplating reaching 100

Among centenarians, 81 percent are women and 17 percent live below the poverty line.  ... Read more

advertisement
Partner Center
advertisement

Connect with us