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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> For many middle-class Americans, retirement<\/a> is a time to finally enjoy the life they\u2019ve dreamed of. But too often certain habits sabotage those dreams, leaving many stressed about money instead of enjoying their freedom. While some of these habits, like overspending, are obvious, others are harder to spot until it\u2019s too late.\u00a0<\/p>\n Here are the top four habits financial experts warn that, unless you address them early, you risk turning your retirement years into a constant struggle to make ends meet.<\/a><\/p>\n Carrying High-Interest Debt Into Retirement<\/p>\n One of the most damaging habits is carrying high-interest debt into retirement. These debts don\u2019t go away when you stop working. And when you\u2019re on a fixed income<\/a>, they can drain your savings faster.\u00a0<\/p>\n<\/p>\n \u201cThat could be due to credit card balances, personal loans, or even high-interest car loans. When you no longer have an income and are trying to live off of fixed income sources, it can make life very difficult for the middle class, and it takes them backwards,\u201d said Chad Gammon, founder of Custom Fit Financial<\/a>.<\/p>\n This habit creates unnecessary financial stress and forces you to use funds meant for everyday living to cover mounting interest payments. The earlier you eliminate high-interest debt<\/a>, the better prepared you\u2019ll be for retirement.<\/p>\n Lacking a Tax Strategy for Withdrawals<\/p>\n Taxes may not be the first thing retirees think about, but they can quietly eat away at their savings. Without a clear withdrawal strategy<\/a>, you may end up paying more than necessary.\u00a0<\/p>\n \u201cLooking at your withdrawal strategy can help save money by not spending it on unnecessary taxes. A smart withdrawal plan strategy can help stretch your retirement dollars,\u201d added Gammon.<\/p>\n By planning withdrawals in advance, you can reduce your tax burden and make your money last longer.<\/p>\n<\/p>\n Ignoring Longevity Risk<\/p>\n Another habit that destroys middle-class retirement dreams is failing to account for longevity risk. Many people underestimate how long they\u2019ll live or how much they\u2019ll need to support themselves in their golden years. This often leads to over-withdrawing, ending up running out of savings sooner.<\/p>\n \u201cNot treating longevity risk like a balance-sheet liability is a habit that erodes many middle-class retirement dreams. This then forces retirees to guess at what their withdrawal rate should be and take out of the savings faster than they\u2019d planned to,\u201d said Yehuda Tropper, CEO at Beca Life Settlements<\/a>.<\/p>\n<\/p>\n It\u2019s always smart to plan as if you\u2019ll live longer than expected and treat longevity as a financial obligation you must prepare for. This could mean delaying Social Security<\/a> or building a larger financial cushion.<\/p>\n Treating a Home as a Retirement Plan<\/p>\n Many middle-class Americans see their home as their biggest asset, which it actually is. However, allocating every extra cash into the house and neglecting contributions to retirement accounts<\/a> is like treating your home as a retirement plan.<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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