5 Common Mistakes People Make When Planning for Retirement

For most working professionals, retirement seems to be the end of their economic independence. Why? This is because you do not get regular, monthly salaries once you retire and you become dependent on your savings made throughout your employment tenure.  Quite naturally, even a minute mistake in your retirement planning may leave you in a lurch in your retirement days.

In order to make a fool proof retirement plan, you’ll need to be vary of some of the most common mistakes that people usually make. We’re sure you’re wondering where you would find a list of such retirement planning mistakes. Don’t worry; we have done the hard work for you. Simply skim through this article to get acquainted to the 5 common mistakes most people make when planning for retirement.

  1. Not Paying Heed to Post-retirement Lifestyle

Post-retirement lifestyle planning remains one of the most important aspects of retirement planning. It is important to carefully mull over the kind of lifestyle you are going to embrace upon your retirement. This will help you set clear and transparent financial goals for your post-retirement life. You will need to carefully choose the corpus depending upon the lifestyle that you wish to lead after your retirement. For example, if you are looking to spend your retirement days with your children and grandchildren around, the size of your retirement corpus will be different as compared to when you choose to spend your retirement days touring around the world. In addition, your post retirement dwelling also makes an impact on your retirement planning. Therefore, carefully mull over the lifestyle that you want after your retirement in order to make a financially sound retirement plan.

  1. Too Late and Too Little

This is by far the most common mistake almost every working professional makes. Most people aren’t really bothered about their post retirement planning, when they are young. Resultantly, they do not save much and by the time they start saving for their retirement, it is already too late. It makes sense to start planning your retirement early and invest in different saving schemes.

  1. Not Being Heedful to Economic Fluctuations

Almost every economy in the world suffers fluctuations. And that’s why it is important to carefully mull over the economic fluctuations well in advance. While it is difficult to escape such economic turbulences, you can stay on guard to ensure minimum impact of such implications. You must plan your retirement in such a way that there is no or minimum impact of inflation on your investment.  In order to successfully do that, you must take into account the current inflation rate and strategically invest for your retirement in accordance with the inflation. This is where pension calculator comes handy.

  1. Not Ensuring Diversified Investment Portfolio

If you are actually looking to make an iron clad and financially sound retirement plan, you will need to ensure a diverse investment portfolio. Invest in ULIPs or equity funds to multiply your wealth manifold, within a short span of time. Remember, just keeping your money invested in one place is not going to do any good to you. Rather you must invest in different investment instrument to ensure greater returns on your investment to help you score a pleasant and worry free post retirement lifestyle.

  1. Not Being Serious Towards Retirement Planning

As discussed above, a large majority of people in India aren’t really worried about their post retirement life and hence, they do not pay much heed to retirement planning. Many a times, this costs them dearly. In addition, most people are of the view that retirement or pension plans offered by most insurance companies do not offer great returns. Also, people are worried about the safety of their investment. Such people may invest their hard-earned money into government initiated schemes such as Equity Linked Saving Schemes, National Pension Scheme or Senior citizen Scheme.

In the End!

Now that you know the 5 common mistakes people make when planning their retirement, it makes sense to put the learning into practice and see to it that you aren’t making the same mistakes.

Rest assured, by steering clear of these retirement planning mistakes, you can easily ensure a healthy, happy and peaceful post retirement life.