Budgeting Mistake: Being Too Aggressive

The general rule you should follow is that you’ll need to replace about 80% of your pre-retirement income in order to enjoy the same standard of living you had before retiring. But this rule doesn’t pertain to everyone.

A big part of retirement planning is deciding how much you would need to contribute if you want to get as close as possible to hitting your goals later on in life. If you’re too conservative, you may not have sufficient funds.

If you’re too aggressive, it might cost your current financial situation, leading you not to having enough finances in the present. This could result in you being tempted to dip into your retirement savings earlier than expected, which will end up costing you a 10 percent penalty.