As a Millennial, Stay away from these Investing Mistakes or You Might Feel Sorry When You Retire
COVID-19 has created a lot of damages and brought many changes, and these changes have affected almost all sectors, including retirement benefits. Retirement accounts are created mainly to be a lifesaver after someone leaves the labor market, and it is only then that they can be accessed. Thanks to Coronavirus, the US government has made a change in the law governing retirement accounts.
This law has made retirement accounts accessible and more affordable for users. Now while this is a better option for most people than to accumulate debts during this period, what many don’t know is that as positive as the law is, retirement accounts shouldn’t be accessed before retirement at all!
Why accessing retirement account before retirement isn’t right
According to a recent study, after retirement accounts providing early accessibility, people have already started withdrawing from their accounts, and others are considering the move. Remember that retirement accounts are meant for when you are out of service. But people aren’t even looking at their savings account; they are already looting the funds intended for when they won’t be receiving salaries. This might be quite dangerous, and most people will regret this. Why?
Withdrawal from your retirement accounts, like 401 (k) accounts before your prescribed period of withdrawal, will cost you (fees). But it is little damage compared to the amount of money (interest) you will lose when you are withdrawing from a retirement account. For example, if you’re taking out $2000 from your account, which could have yielded an averagely 8% annual return after 30 years, you are potentially losing $14,000! Won’t it be better just to let the money make more money for you?
Resist the urge
Your retirement money could be your easily fetched solution in the current turbulent times. You can use this money wisely at a later point in time for several other purposes. Instead of eyeing your retirement money, you can try one of the following:
- Check if you have unemployment benefits (in case you’ve lost your job).
- You can jump on your savings account if you have one.
- The government knows people are going through hard things so they have provided programs that will help you delay the payment of your debt.
- Pick up a side hustle to reinforce your financial capabilities.
- You can even be a freelancer while sitting at home.
The world is going through hard times. Some say fingers aren’t equal. Some people are working, and some aren’t. Some are getting paid even while sitting at home, and some don’t even have funds to provide for their families. Don’t withdraw money from your retirement accounts. Remember, you will reap the long-term benefits. But if you have no choice, you can withdraw it and endeavor to start a new retirement account as soon as possible.
More in Advisor
Thinking of Investing in Stocks? Keep These Tips in Mind for Sure-shot Success
The world is battling a pandemic, and nobody knows when it will end. But one thing is for sure; it has...August 7, 2020
Getting Ready to Plunge into Investments? Have a look at These Tips for some Cool Ideas
Investing in stocks isn’t easy; one needs to develop their knowledge and convert it into a realistic plan. It’s not about...July 29, 2020
Learn How to Secure Your Child’s Future With These Invaluable Insights
Becoming a parent is the most joyous experience of one’s life; however, with the arrival of a new family member, expenses...July 26, 2020
Are you familiar with these Loan Forgiveness Programs for Students?
Student loans make for a viable option to pay for your education, but often, repaying them can be a bit of...July 25, 2020
Lufthansa Airlines is Launching a New Leisure Unit under the name ‘Ocean’ – Here’s Everything You Need to Know
The airline industry is facing a major challenge during the past few months owing to the complete paralysis of movement, thanks...July 23, 2020
Cool Tips to avoid Letting your Income Subside During Coronavirus
There’s an astonishing number of people adversely impacted by Coronavirus all around the world. This stark reality is evident from the...July 22, 2020
The Most Favorable Things in Which You Can Invest In 2020
While the world was anticipating a financial and economic crisis similar to the one in 2008, it instead found itself facing...July 21, 2020
Looking to Secure Your Wealth During These Uncertain Times? These Low-Risk Investment Ideas Might Be Just What You Need
The year 2020 has presented the world economy with unprecedented challenges. Due to the coronavirus emergency and the worldwide reactions to...July 15, 2020
Learn How to Ace Your Next Video Interview With These Expert Tips
Due to the limitations of the Covid-19 pandemic, many people have been met with new issues that need immediate resolution. One of...July 14, 2020