7 retirement mistakes to avoid when you're young

When retirement is decades away, it's easy to put it on the proverbial back-burner in favor of more-pressing money needs and goals. But without a good retirement strategy now, you could be left working longer than you want.

While there's a lot of good advice out there about what to do to prepare for retirement, it's also essential to know what not to do. (As always, this is just one person's experience - we make no claim to provide legal or tax advice, so always plan to speak with a financial or tax professional before making any decisions.)

Retirement mistakes can cost you money. If you're guilty of any of these mistakes, don't worry. Getting back on track sooner than later can help you still achieve your goal.

1. Not having a plan at all

Do you know when you want to retire and how much money you'll need by that time to stop working? If so, do you know how much money you'll need to save each year to reach that goal?

If you've said no to either of these questions, it may be a good time to use an tax savings calculator or work with a financial adviser who can help you create a plan. Because without a plan, you have no idea whether you're on track.

2. Keeping your savings rate the same each year

Retirement experts recommend saving 10-15% of your gross income for retirement. But even if you're already there, it may not be enough based on your goals.

So as you receive a raise each year from work, up your retirement contributions to improve your chances of being ready when you want to be.

3. Not taking your employer's 401(k) match

Many employers offer a 401(k) or similar retirement plan, and many of them match some or all of your contributions. If you're not getting the full contribution match on your 401(k), you're missing out big time.

Not only is that match an immediate 100% return on your investment, but it also boosts your savings rate. For example, if you contribute 10% of your salary and your employer matches up to 5%, your overall savings rate is 15%.

4. Dipping into your retirement

Whether you have a 401(k) or an IRA, it's rarely a good idea to borrow from or cash out your retirement plan. If you're in dire straits, first consider other options like personal loans, credit cards, and asking friends and family for help.

While these may not sound like ideal alternatives, they'll typically cost a lot less over time than the opportunity cost of taking retirement money out of the market.

5. Investing too conservatively

You may feel rattled by the prospect of a recession and how it can affect your retirement savings. But if you still have 15, 20 or 30 years until you leave the workforce, it's generally best to invest your retirement funds aggressively.

That's because everything that goes down in financial markets must come up. Despite several recessions and depressions over the decades since the "Composite Index" was founded in 1923 — it later evolved into the S&P 500 — the average annual return is roughly 10%. So keep your money in the market and invest with the distant future in mind and you won't regret it.

6. Using whole life insurance

Insurance agents will tell you all about how whole life insurance can insulate you from the stock market and provide consistent, safe returns.

But whole life insurance is outrageously expensive if you want to get any real value out of it, and you stand to lose the policy if you can't afford it later on in life. Stick with term life insurance and invest in your retirement accounts.

7. Prioritizing college savings over retirement

If you have young children, you may be wondering how you can help them pay for college. That's especially the case if you're still chipping away at your mountain of student loan debt. But, while student loans are always going to be an option for college students, there's no such thing as a retirement loan. So take care of yourself first then you'll be in a better position to help your children.

The bottom line

Everyone is different, so your retirement goals and plans may be different than those of the people around you. But regardless of the situation, it's important to follow some general guidelines to ensure that you don't leave your future high and dry.