To have a financially secure future, it is needless to say that smart and effective retirement planning is of utmost importance.
Listed below are five retirement planning mistakes, which you should avoid.
The response is given at the right time
According to a 2015 report, just about 38 percent people were able to reach up to the target plan they had devised. We always tend to procrastinate the planning and saving part. From waiting for that increment to investing for retirement after clearing student loans or home loans are common reasons why people procrastinate retirement planning. It is always beneficial to start early as it is much simpler, easier, and convenient to seclude 10% a year now than 30 to 50% later. As is said, “the best time to start is now.”
Overestimating or underestimating your goals
Too much planning is not going to fetch you far and nor is no planning. It is always suggested that you chart a goalkeeping in mind all factors such as current income, expected inflation, expenses, and other savings such as your children’s future and travel plans. It is advisable to consult a financial counselor who devises customized plans that suit personal requirements. One should neither save all the money by compensating the future nor should one frivolously spend everything with nothing left to save.
Not consulting your partner
It is often understood that people envisage retirement plans of their own kind but forget to communicate with their spouse. This could lead to many problems and arguments later. Maybe the other partner has a completely different picture of retirement or has not thought about it yet. It is possible that you are not married yet in which case it is important that you save keeping in mind your future family plans. What suits you might end up being not liked by your spouse, which is not advisable as both of you would be pillars of strength for each other, especially after retirement.
Deciding based on the advice from friends and family
It is not completely wrong to not ask for investment advice, but one should understand that different people have different aspirations and goals. They also belong to different income groups and may have separate priorities. What might be essential for you, might not be important to them. Thus, always confirm with an investment professional and match it with your plan. Also, do not fail to recognize the importance of self-decision.
Overprotecting your children
Parents always want the best for their children and there is no denial to that. But, one should also understand the difference between caring for them and spoiling them. Let your adult children lead their own lives and encourage them to learn the value of money. Maybe they are bright enough to earn a full scholarship or can take up easy part-time jobs to support you in investing in their education. Once they fully start earning, allow them to lead their own lives and decide what is beneficial to them.
