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5 Common Retirement Planning mistakes that you must avoid

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Everyone has to stop working at one point in their lives, and the sooner they have a retirement plan ready, the easier would be their post- retirement life. Reaching 50s is a milestone that many of us celebrate, but it is also a crucial time to reassess our financial situation and make sure our financial plans are in order. And postponing this assessment might jeopardize our plans of building a financially secured future for ourselves and our family.

It is often too easy to make a wrong financial move when preparing for retirement; however, fixing it back lies in the hands of the future retiree. Everyone deserves to have a secure and peaceful retirement after long years of hard work. However, selecting the right retirement plans to get their dream retirement life can be tricky. Therefore, it is essential to start retirement planning from an early age to enjoy our retired life to the fullest.

Here are five common retirement planning oversights that you should steer clear of.

Failing to Have a Solid Plan :

The first step towards a happy retirement is to plan your retirement life way before you reach your late 50s or early 60s. Having a retirement plan is far better than not having any financial plans in place. Ensuring financial safety and security during your golden years of life is the main reason to build a solid retirement plan at a much earlier age. The plan must consider your life expectancy, retirement location, planned retirement age, current lifestyle, general health, and present financial expenses to help you determine how much money to set aside for a peaceful and financially secure retirement life. Regularly update your qualified retirement plan according to your current and future needs and lifestyle to avoid running out of money in critical situations.

Not Being Diligent :

Many of you might have changed jobs several times in your career without realizing that you are leaving money to the company in the form of employer contributions from your profit-sharing or stock options. You miss out on checking the deadlines for these funds and stocks before leaving the company, which ultimately acts as a sizable loss. Similarly, many people fail to plan for the money deposited in their workplace retirement accounts when leaving the organization.

Retiring with Debt :

Carrying multiple debts into retirement will have a negative effect on your life savings. A credit card debt or a car loan will bring down all your emergency funds and retirement savings within a few years of your retirement. Encouraging debt into retirement with no proper source of income and a limited pool of funds can only add more pressure to you in your supposedly peaceful and secure days. So, pay off all your debts before retirement to avoid any last-minute withdrawals from your life and retirement savings.

Neglecting Healthcare Costs :

The late 50s or early 60s are the average retirement ages for the standard working class. Also, these are the ages where you should invest time, money, and energy towards your health to reduce any health-related expenses. Growing older will make you susceptible to critical illnesses, which may require considerable amounts to treat. This might put a significant dent in your retirement savings, and you might run out of money sooner than expected. So, always have a lifetime renewable health or life insurance to take care of all your medical expenses.

Poor Investment planning :

Successful retirement planning requires attention and perseverance on your part to select the right investment plans that will provide you with good returns by the time of your retirement. By comparing various investment options, you can not only make smart investment decisions and choices, but it can also diversify your portfolio to obtain significant returns without risking your savings. So, plan your investments wisely before retirement.

No matter where you are on retirement planning, you are bound to make mistakes along the way. So, starting your planning early in life will reward you with a considerable amount at the time of your retirement. Choosing the best retirement plans will give you a financially secure and stress-free lifestyle in golden years of your life.

Disclaimer:

*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time

The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.

Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

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