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Best Retirement Planning Advice Ever: Know Thyself Did you neglect taking career assessments during high school or college? You may be sacrificing major retirement savings if you're not in the right ca...

By Melissa Brock

This story originally appeared on MarketBeat contributor/ via MarketBeat

A friend of mine spent over 10 years in a career that wasn't a great fit. She earned a meager salary, her bosses sighed every time it came time for performance reviews and she didn't advance in her role.

In turn, that affected her earnings, which affected her retirement savings, which affected her long-term money goals. She's in a new role now, happily working at a nonprofit, and has worked to play catch-up with her retirement savings.

So, how can "Know thyself," ancient wisdom chiseled into the forecourt of the Temple of Apollo at Delphi, apply today?

It can have everything to do with investing, stocks, saving for retirement, and bagging money over your lifetime. Let's explore how choosing the right path for you affects your retirement savings over the long-term.

How Choosing the Right Path for You Affects Your Retirement Savings

You already know your job satisfaction, and in turn, your earnings, depends on how well you do your job, how much your boss likes you, how well your colleagues value you — a million reasons factor into the mix.

If you're not quite being honest with yourself about your abilities or feel stuck in the job you currently have, it can affect your retirement savings.

Reason 1: Your salary determines how much you save.

When you sign up for your employer's retirement plan, you can usually choose to contribute between a flat dollar amount and a percentage of your salary.

If you choose to contribute a percentage of your salary, the amount you save should automatically go up as you start to earn more. However, you might not save as much for retirement if you aren't in a job that fits you well.

Naturally, some jobs pay less than others, depending on the industry you choose. However, if you're not in the right industry in the first place, you may want to consider getting into a new one. Your earnings, and as a result of that, your retirement savings, will increase.

Reason 2: Performance reviews may not pan out.

Most employers partly base their pay decisions on individual performance. If your performance is lacking, you may not receive incremental pay increases. Performance has a significant impact on pay, and especially incentive pay. If you're in the wrong field, your performance reviews may affect how much you earn and how well you save during your working years.

Reason 3: You may feel more disinclined to attain professional associations and certifications.

You may get paid more if you achieve certifications and memberships in professional organizations or trade associations. However, if you don't have a particular certification because you have no desire to get it, you might have a salary that sits at the lower end of the range. In other words, if you're not passionate about joining your industry association, you may be in the wrong career.

Some employers require employees without certifications to work toward them. You may be sabotaging your earnings and therefore, your retirement savings.

Reason 4: You haven't advanced in your job.

Lackluster performance reviews could mean that you don't advance in the company. In turn, it could mean you could sacrifice a lot of percentage-based increases in retirement savings. For example, let's say you've been at a company for 10 years but have continued to stay on at an entry-level role. You might get minimal increases every year, but you may watch as others get promoted over you. Start looking for a completely different career!

Reason 5: Burnout is real.

Take stock of your work-life balance. Do you feel stressed and exhausted all the time? If so, you may face the serious consequences of job burnout. Any physical, emotional, or mental exhaustion from work can hurt your performance and your long-term goals.

Quick Retirement Calculation

Let's say you switch jobs, to something that fulfills you and offers endless potential. Does this automatically mean that you'll make tons of money and effortlessly stuff your nest egg?

No! However, choosing the right field and the right job could enable you to see a more lucrative path forward and offer you the right combination of job satisfaction and long-term success. Let's take a look at two different retirement calculations using MarketBeat's retirement calculator to demonstrate how switching to a different job can make a difference over a number of years.

Calculation 1

Let's say you're 40 years old and plan to retire at 67. Let's say you've already saved $20,000 for retirement. Based on your current budget, your current salary allows you to contribute $200 to retirement monthly. Based on an 8% return, you'd earn approximately $400,460 in 27 years — your target retirement age.

Calculation 2

Now, let's imagine you change jobs and find a much more appropriate career path for your needs. It comes with a larger salary and better benefits as a bonus. Let's keep the general factors the same: You're 40 years old and plan to retire at 67. You've already saved $20,000 for retirement. However, based on your new salary, you can contribute more to your retirement every month. Let's say you can save a lot more — $1,000 per month instead of $200. Based on an 8% return, your investments would amount to $1,313,565 in 27 years!

Learn more about the Rule of 72 and how it can impact your long-term investments over time.

Gear Yourself Toward Optimal Retirement Savings Results

Are you being honest with yourself about your current job and whether it makes sense for your personality, needs, happiness, etc.? Is it allowing you to thrive? Knowing yourself well also means knowing when to throw in the towel on something that no longer works for you.

Again, just choosing to switch industries or jobs doesn't guarantee success. However, it's important to know the difference between whether you're experiencing the right kind of fulfillment in your work. This goes beyond the day-to-day challenges every job presents. For example, if you face much more issues, like intense Sunday scaries or incredible amounts of stress, you may need to switch careers.

Also, remember that people change over time. You're not the same person you were in your twenties, so the entry-level sales job you had at 23 may not reflect the same values or interests you have at age 40.

Know yourself well enough to switch careers when you need to — your nest egg may flourish because of it.

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