Are You Making These Four Costly Mistakes in Your Retirement Plan?
Saving diligently and investing prudently for retirement is a very smart move, but it’s still not enough. Even people who get the basics right often crumble when it comes to other key areas of retirement planning. Preparing for retirement does not stop at saving. There are still a lot of moving parts that will factor into how you plan for the years after calling it a career.
There’s a lot at stake, and most of us can’t afford to mess things up. Here are the four costly mistakes many of us are making in our retirement plan:
1. Not Saving Enough
Too many people are falling far short of their goals. Granted, some people simply may not earn enough to allow them to save as much, but for many of us, it’s more an issue of finding the will and the discipline to save constantly and consistently.
One of the biggest retirement planning mistakes anyone can make is not saving enough money for retirement. Don’t be one of the many who lacks confidence in their retirement plans and wishes that they would have saved more and started saving earlier. You are either saving for or consuming your retirement today.
2. Taking a Loan from Your Plan
Some things are legal but simply not wise. Too many people treat their retirement plan like a savings account. Borrowing money from your retirement savings can be a costly mistake.
When you understand the powerful effects of compounding interest, you should also recognise the opportunity costs of disrupting the process. When you pull money out of your retirement account, you are reducing the amount of money that can compound. Once you place money in your retirement plan,really consider if you should be trying to access it early, of course there is never an absolute rule, circumstances may require otherwise, but always make sure you understand the consequences.
3. Underestimating Health Care Costs
Many upcoming retirees are unaware of or simply forget to budget for the high price of the potential healthcare costs they may need to plan throughout retirement. The cost of healthcare poses as one of the most serious risks to retirement security, so it’s important to plan for this major expense, navigate the system and manage your spending.
4. Failing to Plan
One of the largest issues with retirement is not having a well thought out game plan. Do you have an action plan based on proven principles that will lead to financial stability and success? Like the famous saying goes, failing to plan is planning to fail, so set a financial goal and commit to a plan in writing to achieve it.
Retirement should be an exciting and relaxing time in your life, and it can be. By taking a little time to develop your retirement plan and avoiding the pitfalls mentioned above, you can make the step with confidence.
For this reason, if you’re ready to ensure financial stability post-career, at Del Castillo Investments Corp Pty Ltd, effective retirement planning is what we aim for you. We help you design a plan and provide the accountability and the experience necessary to support you in completing its implementation. Visit our website at www.delcastilloinvestments.com.au