Retirement Plans : an inevitable process most people do not take seriously in some part of the world. When they retire…they have retired.. Retirement planning has a lot of benefits it accrues, Just as old age comes along with so many baggage, a well planned retirement process, could reduce the baggage.
Money mistakes are most times inevitable, human calculations, with a higher probability of failure at retirement age (well it depends on how old you retire) is most likely to disappoint.When young people make money mistake, the older ones suffer it, but when old people make money mistakes, the older people still feel the pain more and it even tends to become more catastrophic.
This is because, they feel and know they might not have so many opportunities to make things right once again. Unlike the young ones. At this time too, savings rate will definitely drop due to the fact that the major source of income has seized.
Preenay Sathu, channel head at FNB Financial Advisory, said: “Retirees must have a clear strategy regarding how their retirement funds will be invested to sustain themselves through the years beyond retirement. Individual circumstances differ and this ultimately informs each person’s post retirement strategy.
“The biggest mistake however is not having a plan at all or assuming that the funds available will be sufficient. Once retired, most people have no other source of income and rely entirely on their lifetime savings which may not be enough.”
All the same, we could learn from other peoples experience and make efficient retirement plans. Old age should be a time to live a happy and relaxed life, time is now so short to be upset about mistakes, so lets avoid ’em mistakes.
Retirement Plans : Learn from these 5 Common Money Mistakes Old People Make (based on experience)
1. Failing to budget
Most retirees, fail to monitor their budget expenses. This is very common with people who have been retired for about 2-3 years. I really don’t know why it is common with them. They just fail to control their costs. Most have the impressions that their time is up, therefore all those leisure times they missed out with their wives could be attained at a brink. Well, it is good to have a nice time, but be careful, you never can tell, an investment may crash. You need to be prepaid at all times.
2. Failing to plan for tax
In some countries, retirees are faced with complicated tax issues. It is nice you plan for your tax ahead of time. seek out new means of reducing your taxes. Already you have a handful of tax to settle.
3. Lifestyle change
This is one of the biggest mistakes most people who retire make. You should know that your lifestyle, while you were still on the job and when you retire isn’t going to be the same thing. So therefore make room for adjustments, on food, clothing etc. As we said initially, age comes with some health issues. There should be provision for this too, this is why you should reduce from one side to balance the other.
4. Conservative investment
Yes, we know that the stock market hasn’t been quit stable, likewise the world economy, but, come on!!! this shouldn’t be a reason for you to fold back your arms when you could actually make a move to better your life and that of your family. Most retirees make the mistake of moving all their money into bonds and other conservative investment practices. Well. they would yield returns but very moderately, your money might not even grow.
Retirees need to step up their game and allocate their assets in a way that allows them to compromise between high risk and high returns. It is advised to invest some money in more aggressive growth investments, (definitely the one you could handle as a Senior). Try to diversify your investments. you need not make so much gain, but you would be comfortable.
5. Taking investment advice from friends and family
Unless you have a family member or a friend who is a financial planner, it is not advice-able to take advice from your family member on business and investment, why? because all they would do is to protect you from unnecessary risks. They might not be willing to take the risk of seeing you sad if the investment crumbles. Therefore, if you need a financial advice, meet an expert in the field for elucidation and enlightenment.
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