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09/24/2014 07:34 am ET Updated Sep 25, 2014

7 Ways You May Be Sabotaging Your Retirement

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OK, nobody is expecting to have the kind of retirement that our parents had. But there are some things we are doing now that may actually hurt our retirement later. Here are a few of them:

Collecting Social Security early.
We understand that the reason someone applies for Social Security at 62 instead of 66 is most likely because they need the money. Unfortunately, starting benefits early means that monthly payments are reduced by 25 percent -- and that's for life. Well, not exactly, says retirement guru Bob Rosenblatt, who runs the Help With Aging website.

There's a little-known provision that gives Social Security early dippers a limited window for do-overs. If you apply for the do-over provision (called a withdrawal of benefits application) within the first 12 months of getting checks and then repay what you received thus far, there are no penalties. They don't even charge you interest on the money you received, which makes this tantamount to an interest-free loan. So if you find a job within those first 12 months of collecting benefits, it behooves you to try and withdraw from collecting Social Security benefits -- and then apply again when you are older. It's one withdrawal per lifetime. And if you can wait beyond age 66, you can maximize your benefits, growing them by up to 8 percent a year until you are 70.

Rosenblatt says of the do-over provision, "It’s something that should be more widely known, especially in these days of economic insecurity for so many older workers."

Not getting your company's 401(k) full match.
This is akin to turning away free money. The most common 401(k) match is 50 cents for every dollar contributed up to 6 percent of your pay; 24 percent of 401(k) plans use this match formula, according to U.S. News and World Report. Whatever it is, it's free money and you should never turn down free money. Rosenblatt encourages people to find other areas in which to skimp so that they can fully fund their 401(k).

Paying for your kids' college instead of funding your retirement.
This one is hard for a lot of families, but the prevailing wisdom is "retirement comes first."

The reason is this: Your child has more options when it comes to college than you do for retirement. Your student can apply for financial aid, scholarships and take out a loan if necessary. Another option to cut college costs is to start at a community college and then transfer those credits to a four-year school. Retirees? It's your pension, your Social Security and your retirement savings. If you outlive your money, then what?

There are no loans that you can take out to fund your retirement, but there are many loans your child can take out to fund his/her education, notes financial wizard Suze Orman.

Downsizing to a less-expensive home and banking some cash.
This is a tricky one, timing-wise, and something worth discussing with a financial adviser. But two problems with this plan come to mind.

Problem one relates to paying for college. When your child applies for financial aid, the majority of schools will not consider the equity in your home as an asset. In other words, colleges don't expect people to sell their houses in order to pay for their kid's college education, said Lynn O'Shaughnessy, a nationally recognized college adviser and author. But if you sell that house and bank some of the windfall, it becomes fair game for schools to ask you to use it to pay college expenses. So while your money may be safe as it exists as equity in your house, colleges may have other ideas about your plan to bank that money for use in your golden years.

Problem two involves long-term nursing care. We are a nation who gives lip service to thinking long-term care insurance is a good idea (two-thirds of us told a Harris Interactive/HealthDay poll that "most people" should buy it), yet just 8 percent of us actually have.

So should we need extended nursing home care, who will pay for it? Under the government's spend-down policy, any dough you have sitting around in a bank account must be used before Medicaid kicks in. Medicaid covers some long-term care benefits, but only after a person’s assets have been depleted. Federal law does protect spouses of nursing home residents from losing all of their income and assets to pay for nursing home care for their spouse. But by and large, the money is less tappable when it remains as equity in your home than liquidated in a joint savings account.

Thinking free is a four-letter word.
Everyone groans when AARP sends them an invitation to become a member on their 50th birthday. Fine, toss it away if you have something against age-based discounts. But for those of us who would like to enjoy more and spend less, those age-based discounts are great opportunities to save money on hotel rooms, car rentals, restaurants, stores and attractions when you travel. Many local restaurants will just knock something off the bill when you ask. Even Banana Republic gives discounts; they vary store-by-store in amount and age eligibility and when offered, but generally amount to about 10 percent.

While saving a few dollars may not seem like a retirement sabotage, it does speak to a mindset that could do you in later. Learning to accept help is a pillar of successful aging. Plus those few dollars add up, so why not say yes when the movie ticket seller asks if you want to a senior discount?

Not embracing the sharing culture.
Peer-to-peer services may be the millennials' greatest gift to our culture. But some boomers just haven't gotten the memo; they remain distrustful of sharing. It's a shame, actually. Sharing is how people are now able to afford travel. They house-swap, rent rooms in strangers' private homes, rent out people's apartments for short-term stays. There are many social sites that will connect travelers -- especially those going solo -- to help them save money. Sites like Couchsurfing and Airbnb have led the way. The biggest attraction of these arrangements is that rates tend to be far below what area hotels charge. Some landlords even throw in a ride from/to the airport.

Hubber has been challenging the traditional car rental model by matching up privately owned cars with vacationers. If you know you are going out of town for a week, it will match you up with someone visiting your city who wants to rent your car. It's cheaper for them and extra money for you.

Sharing a car with another family also makes sense in some circles. If your car sits unused for days, consider sharing it with the people next door. Or forgo car ownership altogether and consider a service like Zipcar, which lets you rent a car by the hour or day as you need it and then drop it off in a reserved parking spot. No car payments and the price of gas and insurance is included. You won't be paying for watching your car in the driveway. Rates in Los Angeles start at $9 an hour after initial one-time set up costs of about $100.

Not seeing untapped income prospects right under your nose.
If your grown kids are out of the house, why are you still keeping their bedrooms empty? Renting to a local college student or new-to-the-area job transfer could put a little extra cash in your kitty. It might even be nice to have someone in the house with you again if you're by your lonesome. A guest house that gets used once or twice a year is a waste of potential income. If you don't want a permanent tenant but are willing to deal with someone once a month, try listing it on AirBnB.

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