Key Takeaways
\nMany people think that certain retirement strategies don’t apply to them or assume that their steady paycheck means they’re automatically on track.Advisors often meet new clients who either save aggressively or spend freely without linking their current financial strategy to their retirement objectives, resulting in them working longer than necessary or missing out on life today.<\/p>\n
Many professionals assume their steady income means they\u2019re on track for retirement. But financial advisors say that\u2019s the mindset that keeps people stuck\u2014working years longer than they need to or missing out on life now. The most common and costly retirement mistake<\/a> isn\u2019t about picking the wrong stocks. It\u2019s about making assumptions about what your income will mean for your retirement savings.\n<\/p>\n “New clients have no idea if what they’re doing will actually get them the life they want,” Ryan Greiser, a certified financial planner and founder of Opulus<\/a>, told Investopedia. David Tenerelli, a senior advisor at Values Added Financial<\/a>, sees something similar, often working with otherwise successful new clients who are leaving significant amounts on the table because they wrongly think they’re “too rich” to contribute to certain accounts.\n<\/p>\n The Autopilot Trap That Many Fall Into <\/p>\n The irony that many financial advisors see is that as new clients gain in income, they are less successful at adjusting the autopilot trap they’ve fallen into with their savings.\n<\/p>\n “The biggest issue isn’t complicated investing strategies or picking the right stocks,” Greiser said. “They’re working hard, making good money, but have no system connecting their daily decisions to their long-term goals.”\n<\/p>\n Greiser said professionals tend to fall into two opposite camps\u2014but both are on financial autopilot. “Some are investing so aggressively they’re missing out on life today\u2014constantly chasing the next promotion, thinking they need to work until 65,” he said. “Others are earning great money but leaving cash on the table everywhere\u2014not negotiating raises, overpaying taxes, barely saving anything meaningful.”\n<\/p>\n Both groups share one critical problem: they can’t connect the dots between their current strategy and the future they want.\n<\/p>\n<\/p>\n The Income Limit Myth That Costs Thousands <\/p>\n Others earn solid money but are holding on to outdated assumptions. “A number of clients have come to me believing that they are ineligible to make IRA contributions because of their high income,” Tenerelli said. “But many new clients are just not aware of their ability to make backdoor Roth IRA contributions<\/a> instead.”\n<\/p>\n The confusion is understandable. There are income limits for deductible traditional IRA contributions and direct Roth IRA contributions. But there’s a perfectly legal workaround that many people either don’t know about or assume they can’t use: the backdoor Roth IRA strategy.\n<\/p>\n