• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Money mistakes could cost you a million

January 14, 2008 12:00:00 AM PST
Some people dream of becoming millionaires, but how many of us could ever fathom losing a million dollars? There are financial mistakes people routinely make that can literally cost you a million dollars over your lifetime.Most of us know the importance of saving for retirement, but that doesn't mean we're doing what we're supposed to. Eyewitness News teamed up with Consumer Reports Money Lab to find ways you can avoid losing a million dollars.

As an independent financial adviser, Rob Freireich finds himself constantly reminding clients how expensive it is to retire.

"People believe that they're saving enough for retirement, when in fact what happens is that nest egg can easily be eaten away by things like inflation and a greater life expectancy," said Freireich.

If you don't have the luxury of working with a good financial planner, one of the most important things you can do while you're young is invest aggressively. In fact, according to Consumer Reports, investing too conservatively for retirement is one of the bigger financial mistakes people make.

"If you invest half-a-million dollars in bonds versus stocks over a 20- to 35-year period, you could lose about three-quarters of a million dollars," said Greg Daugherty of Consumer Reports.

And there are plenty of other ways you could miss out on big bucks. Consumer Reports Money Lab, using hypothetical profiles, came up with 12 money mistakes that could cost you a million dollars.

Consumer Reports says another money-losing pitfall is cashing out money from your retirement account -- you shouldn't do that unless you have absolutely no other choice.