Here’s the first rule of retirement planning: You’re never too young to start retirement planning.

It might sound glib, but it’s the truth. The earlier you start laying the foundation for a comfortable retirement, the better off you’ll ultimately be. And while twenty- and thirtysomethings may think retirement feels distant, it’s not as far away as it seems.

Millennials actually have some prime opportunities to begin planning and saving, ensuring that they can enjoy a prosperous retirement down the road. All too often, though, we see millennials veer off track, falling into some common retirement planning pitfalls. In this post, we’ll highlight some of those pitfalls, and also illustrate some ways to avoid them.

Common Retirement Planning Mistakes

Investing primarily in cash.

Millennials came of age during the Great Recession, so it’s understandable that many of them would prefer cash-only investments to stocks. That’s a marked difference from previous generations, and unfortunately, it’s not a good investment strategy; simply put, cash-only investments don’t offer enough of a return to provide millennials with a decent retirement nest egg.

It’s critical to have a more diverse portfolio, and that’s something your retirement planning advisor can counsel you about.

Tapping into retirement savings too early.

It can be tempting to withdraw from your 401(k) early, perhaps to help fund a down payment on a house or to cover emergency expenses.

Doing so can really sap your savings power, however. Retirement accounts only work if you leave them alone until your retirement. Drawing from them prematurely is something to avoid whenever possible. One smart approach is to start setting aside a few dollars from each paycheck, building an emergency fund you can use for those unexpected expenses.

Not contributing to a retirement plan.

A related problem: Many millennials don’t contribute to their 401(k) or IRA at all.

It can definitely be hard to find extra money to put toward retirement, but remember that even small investments can help. Whether that means putting aside a few dollars from each check or putting your next work bonus toward retirement, make sure you seek opportunities to keep your accounts funded.

Postponing homeownership.

For those whose career means moving around a lot, delaying homeownership actually makes sense. If you plan on staying put for more than three years, however, it may be prudent to go ahead and buy a place of your own. By buying your home earlier in life, you can have it paid off by the time you retire—giving you an invaluable asset to carry with you into those post-work years (and ensuring that you can retire without having to worry about a mortgage).

Underestimating retirement expenses.

How much money do you really need to save for retirement? It varies, but for most people, it’s more than you first imagine. It’s critical to be clear-eyed about your retirement needs—and for that, the best advice we can offer is to meet with a financial planner to create a realistic retirement budget.

These missteps can all be costly, but they’re also all avoidable—and we’d love to talk with you further about developing a prudent retirement plan. Contact Stonepath Wealth Management today to set up an appointment.