Planning for retirement isn’t just about how much money you make. It’s about how you manage it over the years. Certain financial habits can quietly sabotage your long-term goals even if you earn a great salary.
Read More: The Money You Need To Save Monthly To Retire Comfortably in Every State
Find Out: The New Retirement Problem Boomers Are Facing
We asked financial experts to share the most common mistakes they see people make that can delay or even derail retirement plans. From lifestyle upgrades to poor car-buying decisions, these habits may be more familiar than you think.
A car is often one of the biggest purchases we make, but how we buy it can impact our financial future more than we realize.
“If you choose to always lease a car, you will always have a car payment,” said Melanie Musson, a finance expert with Clearsurance.com. “You’ll never reach a point where your car is paid off and you can take what you were making in a payment and put it toward investing.”
Musson broke down a hypothetical scenario where if you leased a $60,000, you may enjoy the ride but after three years, you’d walk away with nothing. On the other hand, if you buy a $30,000 used car with $600 monthly payments, you’ll eventually own the vehicle outright, and you can use the money you were paying toward another expense or savings goal.
Advertisement: High Yield Savings Offers
“Pay it off in five years and redirect that $600 into investments instead,” said Musson. “Over 20 years, and with an average 8% return rate, that decision alone could grow into $100,000 to $300,000, depending on market performance.”
See More: Frugal Retirees: Steer Clear of These 13 Ultra-Expensive Arizona Cities
Getting a raise is exciting, but it can also be dangerous if it fuels unchecked lifestyle upgrades.
“Lifestyle creep is sneaky because it doesn’t feel like overspending, it feels like celebrating success,” said Melissa Cox, CFP and owner of Future-Focused Wealth.
“A raise turns into a nicer car, a bigger house, or just more DoorDash orders… but none of it gets funneled toward the future,” she added.
It’s easy to fall into the trap of spending every new dollar you earn. But without increasing your savings rate, your expenses can outpace your retirement contributions. That gap only gets harder to close over time.
Your home can be one of your most valuable assets. Or, it can be a financial setback depending on how you handle it near retirement.
“One thing that can hurt your retirement is not making the best real estate moves,” said Adam Hamilton, CEO of REI Hub.
