5 Common Mistakes Often Made While Planning Retirement
Planning your financial requirement after retiring is possibly the most difficult time as it entirely depends on how you plan. If you plan properly you could have ample but one mistake in planning and you might have to forget about retiring ever. Retired life should be hassle free of worrying about money or financial crisis and one should be able to lead a comfortable life. After working hard for a long time, one deserves relaxed time in the later life.
There are certain common mistakes people often make with their money, and then most of the retirees cast a disaster for their retirement plan. But you can avoid some of the gruesome mistakes, though, only if you know what could be the possible one. Here are some of the most common five such mistakes you might have already been making and learn how you could deal with them before it turns into a financial disaster.
1. Investment in proper sectors at proper times
Depending on how early or late you start planning your retirement funds; one should never put entire investment in one basket. If you are nearing your retirement, it is against better judgment to invest in stocks. But if you are a long way from retirement then you should invest in different schemes and stay away from bonds or CDs.
2. Undecided retirement fund requirement
It is often seen that most of the people do not know how much their spending will be posting their retirement. To avoid critical situations, later on, one should make a list of things they plan on doing after retiring and then plan the expenses they will need to make for that. This way they can start saving small portions or bigger portions as per the time left. For elders who have always lived on their earnings, it is difficult to ask for financial help if planning fails and they fall short of retirement funds.
“I believe that the biggest mistake that most people make when it comes to their retirement is they do not plan for it. They take the same route as Alice in the story from “Alice in Wonderland,” in which the cat tells Alice that surely she will get somewhere as long as she walks long enough. It may not be exactly where you wanted to get to, but you certainly get somewhere.”― Mark Singer,
3. Rising rates and inflation
While planning a budget for retirement, most of the people forget to include price hikes and higher expenses that would occur due to inflation in future. It is a very important aspect that is usually forgotten or ignored. Skipping this could mean a big flaw in the calculation and in turn create a crisis in future.
4. Who knows how long you are going to live
Most people take average age of 75 years for male and 80 years for women when planning funds. But does one really know how long they are going to live? What if you lived longer than you had planned for, your savings will be over; so better to think that you are going to live for 100 years. It is always better to have more than have less.
5. Relaying much on social security?
Social security in olden times was much more beneficial then what it is these days. Inflation has led to cuts in benefits to the public for the sake of federal budget. So if you are far away from retirement, don’t rely much on social security, instead, try to save through other sources, but if your retirement is not too far, one advice tries to claim your social security benefits as later as possible and try to increase income from other sources. Social security benefits are no more certain and safe retirement plans.
Your top most priority should be to save for your better future, future when you will be retired. Save for yourself first, and rest all can be handled if your later life is secured. It will be useless if you will have to work in your post retirement as well. To enjoy the golden years without the hassle and financial worries start saving for your retirement funds from today itself.
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