Many people worry about their retirement, even those who are relatively secure with defined pension plans or large retirement savings. They worry about making mistakes with their retirement that would cause them to lead a retirement life that will be less than satisfactory. They worry about whether they will have enough money during their retirement. What are the six significant retirement mistakes that consumers make while planning for their retirement or during retirement?Â The following is our list of significant mistakes that many people make and you should try to avoid.
Getting taken in by a Scam or Fraud situation – Protect yourself from scams and frauds by always seeking a second opinion from trustworthy people such as a bank manager or financial adviser. Fraudsters and scammers are everywhere, so always investigate on your own without just accepting what someone is telling you.
Not Managing Cash Flow Properly – we all have cash flow issuesÂ from time to time. Managing your cash flow will ensure that you never get into a situation where you cannot afford to pay the bills.
No Plan for Retirement – Planning for retirement a year before you retire is a hug mistake. Start early with a plan and saving for retirement. Develop a plan so that you know exactly how much you need to set aside every year to have the quality of life you would like during your retirement years.
Not Planning for InflationÂ During Retirement – inflation will always be around, it just varies from year to year. The average inflation rate appears to be around 2.5% to 3%. This means that every year prices are going up by this amount and you need to have the income to pay for it.
Managing Your Health Insurance – health insurance can be expensive and if you have not planned for it, then this could be a huge drain on your savings. Ensure you have the proper amount of health insurance in place to cover you and your family.
Not Planning for Risk e.g. Forced Early Retirement – as with all plans, they do not always turn out the way they were planned. Evaluate the risk issues with your plan. Early retirement, health issues, inflation rates, lower levels of income, major repairs to your home etc are just a few of the things you may want to consider in your risk assessment of your retirement plan.