Every day we come across people from different walks of life. We meet people who hail not only from different age groups but also from varying financial situations. We mingle with people who are in their fag end of their career eagerly waiting to join the Retirees list. Many in this group are mentally prepared to spend their rest of their life with their family and grandchildren. However, only a few in this group are financially ready to live a really gratifying retired life.
Retired life, in reality, requires a lot of money. Inflation and Medical Expenses which are not under the control of anyone eats up all that we save for our retirement. This being the case, unless planned in a proper pragmatic manner, living a retired life with complete financial freedom is impossible. This is why financial planning for retirement right from the beginning of the career is very important. Taking the advice of a qualified financial consultant right from the early stages of life helps in realistic Retirement Planning. Despite all the preplanning efforts and Investment Strategies set right from the early stage in life, most of us make the so-called five retirement mistakes. Let us look at the same in a detailed manner for better understanding.
Mistake 1 – Procrastinating savings for Retirement
Savings is a habit that gets our last priority always. While we are young, we have the highest scope for earning money through different means. However, it is during this young age that we fall a prey for many temptations big and small. We spend money in a lavish manner in unnecessary pursuits being least mindful about wasting the same. By the time we reach middle age, many responsibilities pounce on us disallowing us to have savings on our priority list. Time and tide wait for none. We start worrying about our post-retirement life as we near the same which becomes too late a stage. Procrastinating savings and not starting to save for retirement during the early stage of life is one of the biggest mistakes most of us do. Seek the help of Investment consultants who can recommend you the best SIP Plans in the market. SIP Plans help you save for your retirement in a systematic and easy manner.
Mistake 2 – I must have started early. Now I am old
As we reach middle age, many of us tend to feel that it is futile to start saving towards retirement beyond a point. We feel our middle age is not the right time for Financial Planning towards our retirement. We refuse to seek the expert advice of financial advisor who may provide value-adding advice pertaining to investment plans. When it comes to savings towards retirement, it is better late than never. Your financial planner is the best person to help you prepare a good financial plan that would safeguard you during your retirement.
Mistake 3 – Overlooking Medical Expenses
Old age brings with it a lot of Medical complications. As we age, we tend to become weaker than we were earlier. Our health may deteriorate every passing day and we may be in a position to get hospitalized frequently than ever. We may have to consume bags and bags of medicine which costs a fortune. All these require money. We tend to ignore this main aspect called Medical Expenses when our health is at its prime. We feel safe under the medical insurance coverage offered by your employer. The pitfall here is after we retire we will not be having any medical insurance sponsored by our employer since we will have no employer at all. Taking a Medical Insurance cover on our own will help us manage our medical requirement during old age in a better manner. Go in for the best Medical Insurance plans available in the market seeking professional financial advice so your medical expenses post retirement is taken care off.
Mistake 4 – Imbalance in post-retirement spending pattern
Both overspending and being frugal hurts heavily during the post-retirement stage. Investing in Pension plan right from an early stage in life will help live a decent post-retirement life. Financial planning becomes one of the key aspects to sustain a good standard of living after retirement. This is the stage when people who are highly immobile must shift to the online investment options offered by many financial institutions. Seek the assistance of a good Financial Planner to understand the investment options available post-retirement. Retirement must be an end to a career and not your savings.
Mistake 5 – Looking out for Financial products that offer tax saving
One of the major mistakes that many of us commit while planning for retirement is to be callous towards the benefits attached to the products we choose to invest in. Investment Management is said to be effective only when we understand completely about the products we invest in. Investing in financial products like Mutual Funds will help the money multiply while products like regular Fixed Deposits will make you lose out on tax.
- Avoid procrastinating savings. Learn investment management during early stages in life and start investing towards retirement right from the time you start drawing your first salary
- Come out of the mindset that you are too old to start investing for your retirement. Better late than never – Start now. Ensure your Portfolio Management is at its best at all points of time by taking the help of a good Investment Planner
- Ensure your Portfolio investment takes into account the probable medical expenses you may have to incur post-retirement.
- Be mindful of your post-retirement spending. Go in only for those things that fall under the necessities category. Remember, spending lavishly post-retirement may land you in trouble.
- Invest in financial products that offer tax advantages both during your Pre-retirement as well as post-retirement stages. Focusing on the same before retirement will help you maximize the returns you reap post-retirement.