9 Reasons Why You’re Never Going to Retire

3. You Have Too Much Debt Heading Into Retirement

Having too much debt is one of the biggest hurdles that financial advisor Joseph Carbone has seen when helping clients plan their retirement. Specifically, he found that not having your mortgage paid off when entering retirement can be a potential problem, he said. “By still having a monthly payment when you retire, it often puts a strain on your investments and causes you to withdraw more from the portfolio, which could cause you to run out of money or take more risk than necessary,” he added.

4. You Spent Too Much on a House

A house is one of the most illiquid assets that you can own. Tying up too much of your net worth in a house that is bigger than you need or can afford diverts funds that can be saved and invested for your retirement over the years.

“This happens too much — people are house-rich and cash-poor,” said financial advisor and author Cary Carbonaro. “Your house can’t fund your retirement, and it is a personal use asset with lots of costs, not an investment asset. Correcting the mistake is easy — downsize and use conservative guidelines to determine what you can afford.”

5. You Spent Too Much on a Car

The average car payment has jumped to $483 per month, Edmunds.comreported, which can be a significant amount of money that isn’t funding your retirement. Furthermore, it can also become a perpetual cycle, said financial advisor Benjamin Brandt. “Without proper planning, car payments can become a treadmill of debt, paying off your vehicle just in time for the next one,” he said.

He recommended that savers take time to pay themselves first before buying their next vehicle. “Once your current vehicle is debt-free, continue making your monthly car payment into a savings account,” he said. “Don’t purchase your next vehicle until your savings and the value of your trade-in are enough to buy the next vehicle without debt. Instead of paying interest, you will start collecting it.”

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