Top Mistakes to Avoid in Retirement Planning
What do you do when you are asked the most dreaded question, “Are you prepared for retirement?” Do you just change the topic to avoid answering to it? Maybe yes. But have you ever thought how long you could ignore that. One day we all have to reach the age of retirement, and being prepared for that is the best precaution we can take to live it comfortably. So instead of avoiding such questions, we must be confident enough to answer them.
Fortunately, retirement planning can be started at any point in time, as it is never too late, to begin with, it. Our retirement planning calculator shall be of great help to you for making the best strategy for your retirement. But prior to planning for your retired life, you must know some of the common mistakes to avoid so as to gain the maximum benefits after retirement.
1. Making Outdated Assumptions for Retirement Expenses
It is quite common among the people that when they reach nearby their retirement, they make better assumptions regarding the accumulated assets they own along with the period for which they will last. But, most of the people fail to keep a check on those numbers as they don’t focus on different market conditions they will face. By adopting the outdated methodology for calculating future expenses, they just lag behind making the best plans for their future. One has to realise that until and unless the economy is continuing struggle, one has to face the challenges regarding the inflation hikes, GDP rates, annual growth rate, etc., before deciding their retirement expenses.
2. Taking a Retirement at an Early Age
Working even a few years beyond what you’ve planned can pay you eminently a large sum of bonuses at the time of retirement. The average age of retirement is 60, while some of the people take the decision to retire earlier. This must be avoided, and in fact, you must try work for even longer than the set age limit. The reason being is that this will help you in adding more money to your retirement savings plan and building an additional income to lead a better retirement.
3. Disregarding the Health Care Costs
One of the most overlooked areas of retirement planning is estimating the overall cost that would be required at retirement for the purpose of healthcare. If you don’t have any social security benefit or insurance for your medical expenses, then you must consider the cost of healthcare to add in the total expenditure. Moreover, a particular sum must be kept separate to meet the uncertain happenings to avoid debts at the time of retirement.
4. Not Holding a Diversified Portfolio
A retirement planning investment portfolio must have wide diversification to reduce maximum risk exposure and earn a stable income and capital growth. You must remember the saying, “don’t put all eggs in one basket.” So, it is a must to have a well-diversified investment portfolio with equity and debt instruments of different sectors and companies to earn commendable profits for the retirement benefits.
5. Moving to an Unknown Place
Often people after getting retirement think of switching to some other place to live a better life. Just because they wish to live in a relaxed manner, they change their cities and relocate to get rid of all the worries. It is quite an important decision when it comes to retirement as every new place have a different living standard which may be heavy to your pockets. If it is about vacation only, then it is fine but to live permanently at a new place need several factors to be checked. So it’s better to evaluate the cost factors and standards of the new place prior to moving there all of a sudden.
Our retirement planning calculator has been designed keeping all these factors in consideration to make the best plan for your retired life. Our objective is simply to help you achieve your life’s goal, and when it is about retirement, i.e., the most important stage of life, we want to give you the best solutions.
You must get associated with us right away to plan your retirement with the best of what you may get. MySIPonline and team are ready to support you in your financial planning whenever you want.
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