Retirement Savings Mistakes Financial Advisors See Too Often

2. Forgetting about taxes

Forgetting about taxes can put a serious dent in your plans, especially when taking a peek into your savings account. Tax-deferred accounts will see a portion of that money go towards taxes, and while it’s unavoidable, you can rely on other accounts to help you out. 

Nancy Skeans also advocates for flexibility. If you have a 401(k) or a traditional IRA account, financial advisors say you should consider after-tax accounts. With a traditional IRA you will be eligible for a tax deduction on your yearly contributions, but your later withdrawals will be taxed. 

Roth IRAs work differently. If you expect your taxes to be higher in the future, you should open an account, since you’ll be paying with your contributions and not from your future withdrawals. 

Taxes are inevitable, but it’s up to you how you go about tackling them.