The fact that there is a need to plan retirement is known to and realized by many. Yet, retirement planning is typically replete with more mistakes than one can count. While someone waits too long before they start the planning, others keep withdrawing from the retirement fund each time they need money. So, it is time to ask you: are you making any of the following mistakes in your retirement plans?
Mistake 1: Not having good retirement planning
The biggest mistake you can make is to not have a retirement plan itself. You need to have a proper plan and you need to start planning now. There is no such thing as planning too soon when it comes to retirement. The logic is simple: the sooner you plan, the more you save. Ideally, you need to start planning for your retirement right when you start working and join the workforce.
Mistake 2: Withdrawing too frequently from the plan
It is understandable that you might land up in such an emergency that you have no other way than to withdraw from the retirement plan. But let’s not make that a habit. You are lessening your much-needed retirement corpus each time you make a withdrawal from it. A better idea would be to have more than one retirement plan. Do not make all your retirement plans mature at sixty. Let at least one of them mature at forty, so that you can pay for the house or your kid’s education.
Mistake 3: Not understanding how much is needed to retire
Keep in mind that you are not retiring right away. You are still maybe twenty or thirty years away from retirement, and the market price of everything will change in all these times. Thus, taking your current expenditure into account would not suffice in figuring out how much you need to retire comfortably. It is better to talk to a financial advisor or your bank representative to get a fair idea of how much you need to save.
Mistake 4: Not getting sufficient healthcare insurance
Remember that retirement is the time when you are going to be the most susceptible to different diseases. As your age increases, your immune system tends to weaken and that brings up different diseases. Due to medical inflation, the cost of healthcare will increase by the time you retire. So, make sure you have enough insurance coverage for you and your partner.
Mistake 5: Having no idea about the taxes you pay
You can give your financial planner the responsibility of your tax filing. However, it does not justify you not having any idea about the taxes. After all, understanding the taxes you pay is the first step towards realizing the importance of tax saving schemes. So, gain as much knowledge about taxes and deductions as you can.
If you have been making any of the mistakes mentioned above, it is time to stop. Revise your financial decisions and prepare a solid retirement plan without wasting any more time.