Suze Orman on the top retirement mistakes people make

Here's the main thing people get wrong about retirement.

Transcript

00:00You know, a lot of people think that retirement is simply you need money in order to pay your

00:07bills. That's not what's happening here. When you retire, working gives you validation of who you

00:14are. So I think people make a big mistake in that they retire and they just figure out their

00:19retirement in terms of we have this much money and this is the income we're going to get.

00:23But they don't understand that retirement is a whole lot more than that. And then they start to

00:28feel bad about what they're doing. They also don't understand in terms of that you actually

00:35spend more money in retirement than you did when you were working. Because when you're retired,

00:40you eat out more, you go to see your kids more, you want to take more vacations. So I don't think

00:46they quite estimate everything the way that they should. And they don't really prepare for illness

00:51either. If you take Social Security at 62 or before your full retirement age, in my

00:58opinion, you are making the biggest mistake out there. Because you're not compounding it.

01:05You're not letting it grow. You need to just let it be. And for those of you who can,

01:10you should wait till you are 70. Now those ages may change. But if you're currently about to retire

01:16or thinking about it, full retirement age minimum, or at least 70 if you can.

01:24If you have a 401k, great. Especially if your employer matches. But if you don't have a Roth 401k

01:31and you are contributing simply to a traditional 401k, which is pre-tax, you are making the biggest

01:38mistake ever. You need to go Roth all the way. And besides a Roth 401k or 403b or TSB, you can also

01:48have a Roth IRA if you qualify for it income wise. So the biggest mistake you will be making

01:55is getting a tax write-off now for your contributions to your retirement account

01:59and seriously pay for it later on. Big, big mistake.