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Don’t Make These Mistakes When Planning Your Retirement

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Planning your retirement can feel like a gargantuan task, but it’s one that must be done. It’s never too early to start planning your retirement, especially if you have big goals and ambitions that you’d like to live out. However, there are a few mistakes that you should avoid when planning if you want to ensure you achieve what you set out to do. Let’s take a look at them so you can avoid the most common mistakes:

Not Planning At All

It may seem obvious, but the first mistake is not planning your retirement at all. Around 83% of people don’t have clearly defined goals, and only 3% of people have committed their goals to writing. Studies showed those who wrote down their goals managed to save more than those who didn’t write anything down at all. You may have an idea of what you want in your head, but you need to find a way to solidify it.

Not Saving Enough

Of course, the second mistake is not saving enough. Don’t underestimate how much you need, and make sure you work out the numbers so you have an idea of what you should be putting away. If you plan on moving and retiring abroad, you’re going to make sure you’re vigilant with your saving so that you can reach this goal, otherwise, it may simply become a pipe dream.

Underestimating Healthcare Costs

Healthcare costs are a huge outgoing to consider. You can’t always get away from needing some kind of treatment in your old age, and you will need to think about insurance, inflation, and the unknown. The average couple spends 245k in healthcare costs over retirement, so make sure you plan for this.

Not Investing

Of course you shouldn’t invest too aggressively, but there’s a fine line and you will do well to find it. Investing and building a portfolio as early on as you can ensures that you’re not relying on your savings alone.

Forgetting All About Inflation

Savings alone will depreciate, as the price of almost everything goes up. If you forget about inflation, you won’t have nearly as much money as you think you have by the time it comes for you to retire.

Assuming You Won’t Live A Long Life

You should never assume that you won’t live a long life – you never know. You could smoke like a chimney, drink like a fish, and eat junk food like it’s going out of fashion and still live to be 100. You just never know, so make sure you plan accordingly.

Relying On Your Pension Alone

If you rely on your pension alone, you will likely struggle. Do try to put some more away for your future self so you can live more comfortably. This is so important if you want to spend retirement doing nice things with your family and exploring new places.

Making mistakes when planning for your retirement is common. Avoid those above and you should have a much better time.

 

Image from Pexels

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