I am willing to bet you’ve heard the following saying hundreds of times: “knowledge is power”. When you hear something enough times, it is easy brush it off as old news. When it comes to avoiding the big financial retirement mistake, though, this saying couldn’t be more relevant.

The biggest retirement financial mistake you can make is failing to know what to do with your money in each stage of life. All too often we realize a decade too late that we should have been doing “this” or “that” ten years ago. We forget to look at what we can do now and in the future for the health of our nest egg.

Whatever decade of life you find yourself in, there are ways you can dig in and get it right for the years ahead. Let’s look at the mistakes you need to avoid in each decade to build up your nest egg throughout your working life.

20’s – The Decade of Freedom

1# Neglecting Financial Literacy

Chances are you just got done spending thousands (if not hundreds of thousands) of dollars on receiving a college education. Even so, it is unlikely any of your courses zeroed in on creating a budget, saving, or investing. These are three of the most important things you will need to be financially savvy in the years to come.

If you wait until you are in your 30’s or 40’s to get serious about finances, you are giving up one of the greatest gifts you’ve got: time.

When you mix time and money together, you get what’s called compounding interest. Compounding interest will mean a lot more to the 65-year-old you if you start saving at 25 instead of 35.

The best thing you can do in your 20’s is to dig in and learn everything you can about money and start saving, even if the amounts are small. If you can get these skills under your belt now, you won’t have to learn the hard way, later.

2# Avocado Toast (a.k.a. Unnecessary Expenses)

Have you heard of it? If you are a Millennial or Gen Y’er, you’ve probably done more than hear of avocado toast – you’ve probably spent money on it!

The problem is not the avocado toast itself; the bigger picture is that in your 20’s you are presented with so many trendy opportunities to spend money on all that life is offering you. The trap of spending money on unnecessary expenses is real.

Whether it is an apartment in the city, take-out instead of cooking, or taking lavish trips because it’s what your friends are doing, these expenses add up big time. Worst of all, if you spend with no regard for a budget, you may find yourself living paycheck to paycheck. When you live this way, you reach the end of your twenties and realize you have little to show for it.

Taking a closer look at where your money is going and ditching the “I deserve this” attitude, will help you stop overspending and start saving in this primetime of life.

30’s – The Decade of Adulting

1# Being House Poor

Reaching your 30’s in today’s day and age feels like the milestone of becoming an adult. For many people, it is in this decade that they buy their first home or upgrade from their smaller starter home.

Unfortunately, even after our economy plummeted from a housing crisis in 2008, lenders will still offer you more house than what makes financial sense. For many people, it is a natural response to take what is being offered and get into a mortgage that costs way too much.

When you get a house at the top of your budget, you lock yourself into a long financial commitment. With a lot of house comes a lot of responsibility. You can expect bigger insurance bills, utility bills, and likely furniture store bills to fill up the house.

The best thing you can do is spend less than you can realistically afford. Instead of going with the common 28% rule (common advice is to spend up to 28% of your income on a monthly mortgage payment), opt for spending 20% or less of your income and enjoy the flexibility you will have to do more than hang out at home.

2# Ignoring Retirement

As you really get serious about adulting, a number of circumstances come into play. Whether you are starting a family, getting settled in a career, buying a house, or all three at once – it is easy to put retirement savings on the back burner.

This is especially true if you found it difficult to start saving in your 20’s. Humans are creatures of habit; if saving was not already part of your pre-30’s routine, it is tough to throw it into the mix on a whim. By this time in life, it is not that you don’t know how important saving is, it is that you aren’t committed to fitting it in.

You can get motivated by crunching the numbers. Look at what kind of returns you could receive if you started today versus five years from now.

Whatever you do, do not ignore your 401k, especially if your employer is offering a match. This saving vehicle is one of the most powerful ways to build up your nest egg. Your 401k provides a way to make tax deductible contributions while benefitting from tax-deferred earnings.

If you are not in a place to max out your 401k contribution, don’t worry! Just start with what you can and if there is an employer match, do the math to make sure you contribute the minimum needed to receive the highest amount that they will match.

40’s – The Decade of Enjoying Your Hard Work

1# Living Too Large

Did you know that statistics show your peak earning potential is likely to happen in your 40’s? This is good and bad news.

The good: you have likely put in many years of hard work to get here and you can enjoy the fruits of your labor. The bad: having more income than ever makes it easier to over-upgrade life in all aspects.

Many in their 40’s who are doing well financially will take advantage of nicer cars, nicer houses, nicer vacations and really… nicer everything. This is not all bad but if you also have kids and their college education pending, footing the bill for all of this can be quite an undertaking.

The best thing you can do in this decade is find balance. Enjoy the luxuries of all that you’ve worked for while also knowing your limits. Do yourself the favor of guaranteeing that you can carry this lifestyle into the next few decades.

2# Feeling Like It Is Too Late

Contrary to living lavishly, you may find that you are finally crawling out of financial difficulties at this point in life. If you are just getting above water, it is easy to feel like it is far too late for you to catch up on retirement.

The reality is, it is never too late to start saving. When starting late, you may not be able to achieve the recommended millions of dollars stashed away for retirement, but you will have more than you would if you continue to ignore it.

50’s – The Decade of Looking Around the Corner

1# Neglecting Long-Term Care

Long-term care is not something that we think of or talk about enough. Do you know someone who is living in a senior care facility? It is easy to assume this expense somehow falls under the coverage that Medicare provides but unfortunately it does not. At all.

Getting long-term care insurance is just like any other insurance. The sooner you get this setup, the better. It can feel like a big monthly expense, but it will surely be less than having to incur thousands of dollars per month for care later in life with no insurance.

2# Not Knowing How Much You’ll Have in Retirement

You know that old saying, you don’t know what you’ve got ‘til it’s gone? You do not want this to hold true for your retirement nest egg.

It can be a major undertaking to determine how much you will have in savings by the time you retire. If you combine figuring out your future monthly 401k distributions along with what you will receive in Social Security, it can be a brain buster.

The best way to figure this out is to consult a financial planner. An expert can help you determine where you are with your savings and help you set goals to know precisely how much you will have to live on in retirement.

60’s – The Decade of the Nest Egg Reveal

1# Missing Your Medicare Enrollment

Here’s a mistake that if made, could cost you for life. If you enroll in Medicare at the wrong time, the penalties that you will incur, will stay with you for as long as you have Medicare.

This can be confusing if you plan to delay Social Security and continue working beyond 65. It seems that you could delay Medicare accordingly. It is not so cut and dry.

You have a seven-month window that you can sign up for Medicare without penalties. It begins three months before your 65th birthday month and ends three months after.

However, if you or your spouse work for an employer with 20 or more employees, you can remain on your employer health plan without penalty.

2# Not Delegating Financial Decisions

Over the years, you’ve likely built up a variety of accounts. From savings accounts to insurance policies, there is a lot to keep track of. It is not fun to admit but as the complexity of our finances grows – our ability to cognitively process all of it begins to diminish with age.

Most of us plan on doing everything we can on our own for as long as we can. The data shows that more often than not, by the time we realize that our minds are deteriorating, we’ve already made costly mistakes.

The best thing you can do to protect yourself and your estate is to delegate a power of attorney or someone who has legal ability to make financial decisions on your behalf. Even if you are still very involved in your decision-making at this point in life, having this person in place will be a smart move as you age.

Rebounding Your Retirement

The best way to rebound from financial mistakes is to recognize where you’ve missed the mark, change the way you think about money, and start saving today.

If you start finding ways to immediately begin saving and digging out of debt, you will have a better chance than if you start tomorrow. Too often people struggle with finances their entire life without the people around them ever knowing. If you know you are not good at managing money, speak up and get someone on your team. Whether you work with a financial planner or get your spouse on board to keep you accountable, two is better than one.