Advice for Retirement: 5 Biggest Pitfalls to Retirement Planning

Pensions

According to a recent survey by the Centre for Ageing Better, about 5 million people on the verge of retiring in the UK aren’t financially prepared. Some of these people won’t be able to enjoy their retirement years as much as they would otherwise. Others won’t be able to retire (at least, not yet!).

If you’re still young, you should soak up all the advice on retirement that you can find right now. It’ll help you avoid a situation where you can’t rely on a retirement plan later. Thanks to some forward-thinking, you’ll enjoy complete financial independence throughout your golden years.

Today, we will discuss the biggest pitfalls of pension advice and 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 sooner. It’ll let you save more money and allow this money to grow.

You can take full advantage of compound interest when you begin a retirement plan. By the time you 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 you shouldn’t do it if you know you aren’t cut out to create something as important as a retirement plan.

Instead, you should work closely with a financial adviser or finance professional to get good retirement advice. 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’ll start saving money for retirement and get rich overnight. This is especially true for those who pay to work with financial advisers.

But it’s important to remember that planning for retirement is not something you can do in a day, a week, a month, a year, or even a decade. 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 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 occasionally. It would be easy to borrow some money to take on a home remodelling project or 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’ll kick yourself later when you realise how much money you’ve syphoned out of your retirement fund for things that could have been paid 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 live for about 79.0 years, while women live for about 82.9 years. And it isn’t that uncommon for people to live even longer than that.

This is good news for those who want to spend as much time living the retired life as possible. But it also means that you must be even more diligent about retirement planning, especially if you want to retire early at age 55.

The last thing you want to do is retire in your 60s, live well into your 90s, and see your retirement fund run out. This can make the final years of your life stressful and make you wish you had planned for retirement better.

A financial planner can 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 retirement planning articles, and we can teach you all about pensions. This will help you learn everything you need 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.

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