The Three Biggest Financial Mistakes That You Can Make

Published Thursday, March 12, 2015 at: 7:00 AM EDT

There are many things a young person may be able to do to achieve great financial success despite today's challenging job opportunity and difficult credit markets. Creative planning, hard work, perseverance, the ability to think, and yes, luck, all can help you to make it big. However, there are three mistakes you can make that will doom your future. Here they are:

  1. Failure to save all that you can. Starting with your very first job or business opportunity, save every cent that you can. Put yourself on a pinch-penny budget and stay there for years and years. Invest the maximum in any and all retirement plans that are available to you. (At a minimum, use the company match). And – equally important – avoid high-interest debt like the plague. Don't buy new cars every year or so. Don't buy more house than you need.
  2. Failure to keep working as long as possible. Do not – repeat, do not – retire at age 62. You may think that Social Security benefits will not play a big role in financing your retirement. Think again. Every dollar is going to count. Plus, by not retiring too soon you will continue to save more, and more.
  3. Failure to seek financial advice. Select a trusted financial advisor early in your career and stick with him or her for guidance over your working life.

This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.

An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.

Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).

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