10 Surefire Ways to Retire Broke

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If your goal is to reach 65 broke, with no way to retire, then this article is for you. Here are 10 surefire ways to retire broke:

  1. Don’t invest until you can afford to: The last thing you want to do is invest in risky stocks and bonds before you’re debt-free. Wait until you can comfortably afford to invest, and then dip your toe into the stock market. Wait to have children until you can afford them, too.
  2. Keep switching mutual funds until you find the perfect one: You don’t want an average mutual fund that at best keeps up with the S&P 500, do you? You deserve the best mutual fund out there, so keep switching your money until you find it.
  3. Remember, you get what you pay for: This is as true with mutual funds as it is with cars. So always invest in funds that charge front-end loads and high annual expenses. I’m sure these funds wouldn’t charge so much if they weren’t worth it.
  4. Borrow from your 401(k): It’s your money, after all, and the interest you pay goes back to you. Besides, you deserve that vacation. So go ahead and borrow from your 401(k).
  5. Never roll over your 401(k), just spend the money: Changing jobs? What a great opportunity to liquidate your 401(k) from your old employer. But don’t roll it over into an IRA or your new 401(k) plan. I say its time to celebrate having survived that last job. They’ll be plenty of time to save for retirement in the new 401(k).
  6. Always turn away free money: So your new employer matches 401(k) contributions. You don’t need handouts!
  7. Remember, diversification is for the ignorant: You’re smart, so put all your eggs in one basket. If you can, keep your entire 401(k) in company stock. I’m sure it will do great.
  8. Ignore all those myths about compounding: You know better than to believe all those silly stories about compounding. You know, invest early and the money will grow into a fortune over the long term. Yea, right.
  9. Never reinvest dividends: Spending the dividends now is great way to reward yourself today. Besides, reinvesting those few dollars today can’t have much of an impact at retirement.
  10. Keep your money safe: If you do invest, keep all your money in saving accounts and other safe investments. Who can sleep at night knowing the stock market may go down?
Published or Updated: March 29, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Sharon Morin says:

    After my recent retirement I wrote my feelings in my blog and for some interesting content I Googled, retiring broke in America, and you url was list. I Loved your Writing on 10 Surefire Ways to Retire Broke. I linked it in my blog. They say hin-sight is always better than fore-sight. I think it should be a required subject in schools and at home [but you can't teach what you don't know] about money. And I don’t mean how to write a check and balance your checking account, I mean about the value of saving, investing etc. You see I didn’t have a clue, poof, just wasn’t there. So here I am, starting from scratch. But I believe it’s never too late to start!
    Keep up the writings, I’ll keep sending folks here to read. :)
    Thanks
    Sharon

  2. BTGNow.net says:

    Completely agree with all of these, but especially #1 Dont invest until you can afford to!

    Investing early gives you that many more years of compounding, and that translates into way more money in the end. I wrote an article about how, when it comes to investing, time in money, which can be found here: http://www.btgnow.net/2008/08/compound-interest-is-free-money-part-3-time-is-money-friend/

    I think it goes very well with your first point. Great post!

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