The word retirements bring with it a lot of anxiety & worry. The biggest worry of those approaching retirement is creating a balance between the life they live now in comparison to the life they wish to live after retirement. Here we have listed the top 4 pitfalls to avoid while planning for retirement.
Not having a proper financial plan in place:
To avoid impairing your retirement and running out of cash, devise a plan that considers your projected lifespan, intended retirement age, retirement location, general health, and the lifestyle you’d like to lead prior to deciding on how much to set aside.
Update your plan on a regular basis as your needs & lifestyle change. Look for the counsel of a certified financial planner to make sure your plan makes sense for you.
Not having a clear insight of your cash flow needs:
During the years of saving for retirement, the attention is often on how big we can grow our nest egg. But as soon as you enter retirement it is critical that you’ve a clear insight of your cash flow needs, and a system to stay within your retirement budget.
Underestimating health care expenses:
This is generally a discounted area of retirement planning. With medical insurance, people are likely to ignore the rate of increase of premium every year and illnesses beyond the coverage of the policy can make a big hole in your wallet at an older stage. Health care costs must be considered cautiously in order to avoid unexpected expenses after retirement.
Retiring too soon:
Start by crunching the numbers. Is the lifestyle you’re planning to live really viable? You may live till the age of 95 and you don’t wish to outlast your money. But even if the numbers are on your side, retirement is an absolutely personal matter. Don’t get influenced by other people’s decisions. Taking retirement before you are prepared can lead to unnecessary stress.
Take your time. Most preferably, switch slowly if you can. Work part-time or start a new business before you retire. You can work with a retirement planner or life coach to tackle the emotional, psychological and financial implications of your unique transition.
It’s never too late to start planning for your retirement. If you find the job of strategizing your financial life for the coming 30 years crushing, it might be time to rely on a professional financial planner to get a second opinion.
Disclaimer: The information in this commentary is for informational purposes only and not meant to be personalized investment advice. Please contact your investment professional for investment advice and before investing in any product. ACPI does not publish market research and Sunil Chugh is not registered as a research analyst. The content is from sources believed to be accurate and the opinions expressed are those of the author and do not necessarily represent those of ACPI