We all dream of the day when we can stop working, put our feet up and enjoy a relaxing lifestyle. You can get up when you like, take a vacation whenever you want and you can truly unwind.
However, retiring does come at a price. If you retire too early you can find yourself in a sticky situation where you have a lack of funds and not enough income.
It is therefore crucial that you plan your retirement properly to make sure you have enough money to see yourself through your final years.
Here are 4 common mistakes that should be avoided:
You are a fool if you think that you can put money away with no real goal. You need to estimate how much you’ll need when you retire in order to save enough. The last thing you want is to be 10 years down the line and behind schedule.
Find out how much you’ll need, set up a plan and then stick to it. On average, plan to save up to 70% of your former income.
Dragging it out
When it comes to ripping off a plaster, the worst thing you can do is to delay the inevitable. It’s going to come off at some point, so why not just do it now and do it fast?
The same goes with a pension. Why postpone the payments until it is too late? Start early and you’ll build up a hefty nest egg.
Having debt in the form of credit cards or loans isn’t terribly bad as long as you have an income and make an effort to clear it. However, when you retire you will not have a fruitful income and therefore any prospect of wiping it out becomes uncontrollable.
Going into retirement with a mortgage is OK as long as it is manageable but endeavour to retire debt free. Age UK, The National Debtline and The Money Advice Service can help you with debt problems.
Thinking of others
It sounds selfish but you really need to think about you and your future. Too many parents are putting their children first and the impact on their retirement is immense. Yes, there will come a time when you want to buy your kids a new car, pay for their university fees, pay for a wedding or help them out with buying a house but at what cost?
Putting your own savings on hold to fork out such large expenses can set your retirement back by years. It’s easier said than done and of course you want to support your children to help them become successful and get opportunities in life, but there needs to be a balance of self-sufficiency.
So there you have the 4 worst financial blunders you could ever make when retiring. Now whatever you do, steer clear of them and avoid them like the plague.
This article was written by Cheselden, the UK’s leading specialists in NHS Continuing Healthcare and NHS funded Nursing Care. For more financial advice, speak to the experts today.