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This retirement mistake could cost you over one million dollars

Many people don’t realize the importance of a retirement plan until it’s too late.

This could cause you to lose millions in the long run.

One way retirees collect an income is through Social Security, which will see a boost in 2022 by about $92.

While many survive on that income, it’s incredibly hard to do.

Related: There are only a few weeks remaining to manage retirement plans, don’t miss deadlines and pay penalties

Social Security is only designed to give people up to 40% of their earnings from before they retired.

It’s important to make sure that you save enough money to live on by the time you retire an addition to any Social Security.

How does saving for retirement work?

Experts claim to retire comfortably you should have $2 million by the time you retire.

That sounds like a lot, but if you’re decades away from retirement, you could save that much if you start young.

A 401k is one way to save.

Related: 5 things to know when claiming Social Security so you can save hundreds

IRAs, or individual retirement plans, are another.

A 401k normally offers an employment match and an IRA offers more investment options.

Whether you choose one, the other, or both, you want to start as early as you can.

The later you start, the greater the amount of money you lose will be.

Related: 11 major changes for money happening in 2022; Social Security, Medicare, and student loans all impacted

Make sure to do your research before choosing a plan, because a lot of plans involve investing. Investing always has a chance of losing value.

Index funds are a safer way to invest.

Index funds hold stocks, bonds, and commodities.

By choosing not to invest in your retirement, which can gain thousands per year, you risk losing hundreds of thousands of dollars over the span of decades you choose not to invest in a retirement plan.

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