5 ways to derail a retirement plan

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Nobody ever said that retirement planning was going to be easy. Americans worry about retirement planning. According to a recent Gallup poll, 61 percent are very or moderately worried about not having enough money for retirement, and 58 percent are worried about not being able to pay costs associated with a serious medical issue.

If you’re among the worried, here are the five circumstances most likely to derail your retirement in order of least serious to most damaging.

Taking a 401(k) loan. As long as your employer allows it, you can lend yourself up to $50,000 from your 401(k). Sometimes, taking one of these loans makes sense. But often it doesn’t because people don’t pay them back and the loans turn into a distribution, complete with income taxes owed plus a 10 percent penalty for those younger than 59 1/2.

Taking the money out of your 401(k) when you change employers. Cashing out your retirement fund — even when it is a small amount — is almost never a good idea.

Starting retirement savings too late. If you start saving when you are in your 20s, you’ll have the power of compound interest on your side. If you wait until you’re 50 and starting to panic, you’ll have a hard time catching up.

Not saving enough. Some 57 percent of workers told the Employee Benefit Research Institute, or EBRI, that they have less than $25,000 in total savings, and 28 percent have less than $1,000. That won’t go very far.

Failure to save at all. One-third of workers told EBRI that they aren’t saving anything at all for retirement — even though they admit to knowing better.