Just as every generation has unique financial challenges, so too does each generation have unique roadblocks that can hinder their financial futures. Here are the most common money mistakes I see Millennials, Gen-Xers and Baby Boomers making. Millennials: Ignoring Retirement Savings I know saving for retirement can be a low priority for many millenials. Additionally, I know that, between the struggles of paying down student debt and finding a lucrative job after college, that there may not be a lot of excess cash available for saving in an IRA or 401k. It’s important to remember that even small amounts of money can add up to large sums over the long term. Imagine Jack, a millenial, is 25 and invests $50 a month into an IRA and achieves a hypothetical 8% rate of return. After 40 years, he’d have about $155,430. If Jack waits just five years to begin saving, that number drops to about $103,390. If your employer has a matching contribution in your 401k, it’s important to try to save enough to maximize the match; ignoring it means you’re leaving money on the table. Generation X: Cashing Out an Old 401k One of the most harmful financial mistakes you can make is dipping into your IRA or 401k before you’re allowed to take penalty-free distributions. When people move jobs, they may cash out their old 401k rather than rolling it into their new employer’s plan or into an IRA. The problem is that if you’re younger than 59.5 (or 55 in some instances), you’ll not only pay income taxes on the amount cashed out, you’ll also pay a 10% early withdrawal penalty. A Roth 401k wouldn’t have any income taxes, but you’d still incur a 10% penalty. Let’s say you’re 40 years old, in the 25% tax bracket and have $50,000 in a tax-deferred 401k that you want to cash out. In addition to paying $5,000 in penalties, you’ll face federal income taxes of $12,500. This means more than a third of the total is lost to taxes, and that’s before taking into account potential state taxes. Baby Boomers: Not Planning for Social Security The rule of thumb that many people follow is to simply claim Social Security once they turn 62. This is the earliest you can begin drawing benefits, but the reality is that there’s an 8-year window between ages 62 and 70 during which you can claim benefits. The longer you delay filing, the higher your benefits will be once you do file. There are certainly situations when it may make sense to file at 62, but it’s important to fully analyze all of your options before you file. Making the best Social Security decision could mean hundreds of thousands in additional lifetime benefits. No matter how young or old you may be, no one is immune from making a financial mistake. The key to preventing these mistakes is continued financial education, and no one is too young or too old to learn more about personal finance. *This article originally appeared on March 5, 2017 in the Des Moines Register. You may view the article here. Jim Sandager, CFP®, MBA is the Senior Vice President and financial advisor at the Wealth Enhancement Group® located in Des Moines, IA. As a CERTIFIED FINANCIAL PLANNER™ professional, Jim brings an extensive retirement income planning background to the team. He regularly writes a personal finance column for The Des Moines Register’s Business section and also co-hosts the popular WHO radio program, “Your Money,” with Bruce Helmer on occasion.