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- Saving for retirement is a daunting task that requires years of planning, saving and strategizing.
- In Insider’s Real Retirement series, we ask everyday people approaching or retiring what they wish they had known about being ready to quit working.
- The retirees featured below have reached the finish line, but they have made and seen mistakes along the way.
Saving for retirement isn’t always easy.
In Business Insider’s Real Retirement series, retirees share their top retirement tips, what worked for them and sometimes what didn’t.
Whether it’s keeping their portfolios over-invested in the stock market or simply starting too late, these three retirees share the mistakes they’ve made and seen that could have affected their retirement.
See insider picks for the best retirement plans »
1. Don’t keep too much risk in your portfolio
Dirk Cotton, a former AOL employee, retired between the bursting of the dot-com bubble and the start of the Great Recession.
Keeping a portfolio fully invested in the stock market risks losing significant sums, which can be a problem if you don’t have time to recoup those losses. Cotton says he saw a lot of people run into trouble with this when the stock market crashed in 2008.
“A lot of people had 100% in stocks when they were saving for retirement and lost over 50% in a very short time,” he said.
He advises people to work with a financial planner to find the right balance for their portfolio. “Find a good financial planner or retirement planner,” he said, “and start cutting your equity allocation, aiming for 40% or 50% when you retire.”
2. Don’t delay saving
David Fisher, who retired at 65, didn’t think much about retirement when he was younger. “I started late. From 33 to 43, those quarterly statements I got from a TIAA, I threw them away,” Fisher told Business Insider.
Fortunately, his employer put money in his retirement account all the time. “After about a year, you were acquired and they invested 6.2% of your gross pay into your 403b retirement plan with TIAA, whether you invested in it or not.”
While in his 40s, he opened one of the statements. “I said, ‘Oh my God, I’ve got $30,000 to $35,000 in there. It’s my money,'” he said.
It should be noted that not everyone is so lucky: most employers only contribute to your pension plan when you do, and even then, up to a certain amount (if they do). at all). If your employer offers a match, most experts recommend contributing at least as much as needed to get the full match.
3. Don’t overlook the power of passive income
Corky and Patty Ewing never earned more than a middle-class income for their Southern California home, but passive income has made retirement not only possible, but comfortable. They own four properties: three rentals and one where they live.
But they would have liked to buy more. If they could turn back time, they say, they would have bought more properties and set up even more passive income streams to fund their retirement.
“We never made a lot of money,” Corky told Business Insider. “But, thanks to the power of compound interest and the appreciation of stocks and rentals, we’ve found ourselves in a pretty good position now. It’s amazing for both of us.”
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