Top Retirement Planning Mistakes
When it comes to retirement, it is one aspect of life that many people look forward to, but it is also an aspect which requires a great deal of planning in order to be successful. Saving and investing enough money to sustain yourself for what could be around 30 years or more can be a difficult task and in some situations, working out how much you need can be tricky. Although many people do a good job of planning their retirements successfully, there are a number of common mistakes that people make, and these are listed below:
- Not accounting for inflation
Although the amount of money that you have saved might seem like a lot now, you have to remember than in 10,20 or 30 years’ time this amount of money could up to halve in value, as a result you need to ensure that your investments are in line with any inflation that occurs over that period of time. Many pension and investment companies will offer you a projection of how much your money will be worth taking inflation into account and it’s worth taking this on board when choosing your annuity.
- Not choosing the right annuity
Many people are overwhelmed by the sheer volume of information that is available and the amount of options that are on the market, as a result they can make a hasty decision which may not always be the right one. Shopping around for an annuity can save a person over 20% on their annuity income, if you add this up over 30 years that’s a reasonable saving and extra income for you and your family.
- Not understanding your annuity
Many annuity plans come with added features, this could include an annuity income guarantee period or insurance-type policy to cover you in the event of an unexpected death. You could also be eligible for an enhanced annuity which could give you a greater income if you are suffering from poor health and a shortened life expectancy. Not understanding where you could be eligible for a bonus or benefit can be detrimental to your retirement income.
- Not preparing early enough
From a young age many people shelve their pension as a problem that they will deal with later on in life, the main problem is that life travels quickly and sooner than you know it you have arrived at retirement age, ill-prepared for what lies ahead. Preparing and planning your retirement from an early age means that you can be assured that you will be comfortable and well-financed throughout your retirement period.