11 Nov The Retirement Planning Mistakes That You Should Not Be Making
When the time for retirement arrives, the last thing we will wish for is a plan for retirement that has unexpectedly gone awry.
Many of you might already be accustomed to making investments. Even with investing, there can be the need for frequent adjustment and fine-tuning, due to factors ranging from the vagaries of the market to the tweaking of your personal life goals.
With a plan as crucial as retirement, having to factor in the long planning period from present till actually retiring entails the possibility of many external changes that could jeopardise your initial arrangements.
Below, we will spell out the common retirement planning mistakes that you can look out for, in order to help you age worry-free.
Planning Only for the Best
Life is hardly smooth-sailing all the time, and this applies similarly to life after retirement.
When painting a picture of your ideal retirement lifestyle, you might find yourself thinking merely of the good and the ideal, likely leaving out the possibility of potential problems or hardships.
When planning for retirement, it is crucial that you give thought to alternative scenarios and events that could entail the need for additional monetary funds in your golden years.
With the advancement of technology at the workplace, older employees are getting retrenched earlier than before. Or, the idea of being able to enjoy life a little more at a sooner stage might begin to appeal to you, and it is possible you opt for an early retirement.
Not forgetting the possible onset of illness, or the case of your loved ones needing assistance in the form of additional funds from you.
These are merely a few cases that, when faced with at no prior warning, can immensely impact the viability of your planned retirement fund.
In order to prepare for and dampen the impact of these highly possible scenarios, it is crucial that you plan for them right at the outset.
An Outdated Plan
Many of you will only retire in your 60s. Staying dedicated to your career, family life and personal goals in the long journey prior to retirement often leaves little time for a regular review of plans.
The many years between the drafting of a plan till actual retirement leaves substantial time for change to take place.
These changes could either be those on a more personal level or in the external factors that in fact tangibly impact the funding plans made for your golden years.
With regards to changes on a personal level, you could experience a shift in expectations of the lifestyle, aspirations and hopes for retirement. As you age, it is only natural for there to be a shifting of either your direction in life, or your priorities.
The factor here that more crucially necessitates regular reviewing of your plan, are the changes in external economic factors that have the power to alter the viability of your retirement fund.
The prospect of inflation and an increasing cost of living should not be unfamiliar to you. In our other article, you will be able to find out more about how we will not only face a worsening strain on daily expenses, but also on the increasing costs of elderly healthcare here in Singapore.
Healthcare costs for the aged are similarly not exempt from rising inflation rates, and have also been predicted to rise at alarming rates.
Ensure that you enter retirement with a plan equipped to financially support you. Check back on your plan on a frequent basis and do not be afraid to make necessary changes!
The transition from work into retirement can be an instrumental life change for many of us, and our family members are not excluded from the effects of such a change.
Many make the mistake of failing to communicate adequately with their spouses when they set out to create their retirement plans.
It is not unusual for husband and wife to have differing ideals and expectations with regards to retirement life. Different goals might also require its own dedicated set of funds.
Arriving at a shared view of retirement life as a couple or family at the initial stage of planning provides the opportunity for saving up for retirement together, and leaves room for the adjusting of expectations.
Each individual in a marriage can also have a different risk appetite for investment. This could affect the process of selecting a means of investing to grow the shared retirement fund.
Considering not only your spouse, but even your children or grandchildren in a retirement plan is not uncommon. It helps to discuss with your significant other the possibility of leaving money for your children, or contributing to your grandchild’s education fund for instance.
Journeying through life as a couple does not halt even in the later years. Plan as either a couple, or even family unit, to sustain meaningful life even after retirement.
Think of It as a Process
Your retirement plan should be equipped to readily adapt to life’s twists and turns.
Rather than seeking to create a perfect plan, it is more important to effect regular revision and fine-tuning.
Such consistent effort will in turn provide you with the assurance of a plan that is both ready and able to tackle unprecedented challenges or new life aspirations.