According to a recent survey conducted by the Centre for Ageing Better, about 5 million people who are on the verge of retiring in the UK aren’t financially prepared to do it. Some of these people won’t be able to enjoy their retired years as much as they would otherwise. Others won’t be able to retire at all (at least, not yet!).
If you’re still on the younger side, you should soak up all the advice for retirement that you can find right now. It’ll help you avoid finding yourself in a situation later where you can’t rely on a retirement plan. You’ll be able to enjoy complete financial independence throughout your golden years thanks to your forward thinking.
Today, we’re going to discuss the biggest pitfalls to retirement planning that far too many people struggle with. Check out five of them below before planning for retirement and starting to save money.
Waiting Too Long to Start a Retirement Plan
It’s never too late to start a retirement plan. Even if you only take part in one for a decade or so, it’ll be better than nothing.
But if possible, you should try to start a retirement plan on the sooner side. It’ll let you save more money and give this money an opportunity to grow.
You’re going to be able to take full advantage of compound interest when you begin a retirement plan. By the time you’re ready to retire, your money will have grown substantially.
Planning for Retirement Without a Professional’s Help
If you work in the finance industry, you might be able to map out a retirement plan for yourself without a problem. But if you know in your heart that you aren’t cut out to create something as important as a retirement plan, you shouldn’t do it.
Instead, you should work closely with a financial adviser or another professional person within the finance industry to get good advice for retirement. They’ll be able to guide you in the right direction as you set out to finish planning for retirement.
Getting Impatient When Saving Money for Retirement
Some people are under the impression that they’re going to start to save money for retirement and get rich overnight. This will be especially true for those who are paying to work with financial advisers.
But it’s going to be very important for you to remember that planning for retirement is not something you’re going to be able to do in a day, a week, a month, a year, or even a decade in most cases. You’ll need to be patient with your retirement investing strategy and give your retirement fund time to grow.
You’ll also need to resist the urge to start moving your money around any time the value of your retirement fund goes down. If you get too impatient while planning for retirement, it could come back to bite you in the end.
Borrowing From Your Retirement Savings
Once the value of your retirement fund starts to grow, it should continue to trend in the right direction. You’ll be so excited to see all your retirement planning paying off.
But you might also find that you’ll be tempted to borrow from your retirement savings from time to time. It would be so easy to borrow some money to take on a home remodeling project or to purchase that sports car you’ve always wanted.
Depending on your specific financial situation, borrowing from your retirement fund might not do too much damage to you. But it might also set you back in your retirement planning and possibly even put you in a position where you get into borrowing from yourself all the time.
It can be tempting to try this. But you’re going to kick yourself later when you realise how much money you’ve syphoned out of your retirement fund for things that could have been paid for in other ways.
Failing to Put Enough Money Into a Retirement Plan
People are beginning to live much longer in the UK these days. Men are living for about 79.0 years, while women are living for about 82.9 years. And it isn’t that uncommon for people to live even longer than that.
This is obviously a good thing for those who want to spend as much time living the retired life as they can. But it also means that you’re going to need to be even more diligent about retirement planning, especially if you are looking to retire early at age 55.
The last thing you want to do is retire in your 60s and live well into your 90s and see your retirement fund run out. It can make the final years of your life so stressful and make you wish you had planned for retirement better.
A financial planner will be able to talk to you about how to avoid this happening. By tweaking your retirement plans, you’ll be able to ensure your money lasts for a very long time.
Contact Us to Get Great Advice for Retirement
Does the idea of saving money for retirement and putting together a winning retirement plan confuse you? Consilium Asset Management can provide you with plenty of advice for retirement.
We’ve published many articles on planning for retirement, and we can teach you all the ins and outs of pensions. It’ll help you learn everything you need to know about retirement planning and how to do it effectively.
Would you like to speak with an adviser from Consilium Asset Management about your specific retirement questions? Call us to talk to one today.