Mistakes to Avoid When Planning Your Retirement

 

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For many people, reaching the age of retirement is a big milestone. You will have finally completed your part in helping society run smoothly, and can now relax and live out the rest of your years in peace. That is if you have planned for it accordingly. Just like anything in life, planning for your retirement can be riddled with mistakes that are easily made. Luckily, many people will have retired before you, and as such you can learn from their mistakes, and avoid making them. Here are several mistakes to avoid when planning your retirement.

Planning to retire too late or too early

Some people love their jobs, and can’t foresee the day when they have to retire. Others are the opposite, and eagerly tick off the days until they can finally stop working. Sometimes people will figure out how to retire early or be presented with the option of doing it, and others will cling to their work for as long as possible. Both of these options are quite often mistakes. For example, if you plan to retire too early you can face problems such as an inadequate amount of funds available to comfortably live out the rest of your life, or you could find that you just end up becoming incredibly bored. Similarly, if you plan to stay in employment past the recommended age of retirement, you might find that one day you are not as fit or healthy to do the other things in life that you had planned once you no longer needed to work.

To avoid making either of these mistakes, you should evaluate what is important to you in life, and plan in enough time while you are still able-bodied enough to do the things that you want to do during your retirement. You should also ensure that you work, and save for long enough to give yourself a financially stable retirement. Lastly, you should not fixate on your retirement too much, but instead try to live in the present, and enjoy what is in front of you.

Miscalculating your financial situation

A mistake that can happen to you during any part of your life is miscalculating your financial situation. Generally, when you are younger, or still in full-time employment, these mistakes are more easily rectified as you will have time, skills, and resources to correct the mistake. However, if you are retired, not so able-bodied, and have a finite amount left within your budget, if you have miscalculated your financial situation life can become very tricky, and uncomfortable. That is why it is so important to plan your finances correctly so that you do not put yourself in a vulnerable position.

To help yourself avoid these kinds of mistakes, where you find yourself with significantly less money than you first thought, be sure to understand exactly how much money you will receive from your pension or annuity funds, and how much you will be taxed on them. You should also make sure you have researched and estimated how much it will cost you to live each year, and have an emergency fund available should something unexpected happen, or go wrong.

Not assessing all of your available options

Whether it is savings funds, investment opportunities, or retirement homes, when you plan to retire you will want to make sure that you have assessed all of your available options to help you live an enjoyable, comfortable life. It might not seem like a big deal right now, but if you simply take no time or effort into researching these important decisions, you can find yourself in a position you don’t want to be in that can last for years, or even indefinitely.

To avoid making this mistake, just take a little extra time while you are planning out your future, assess all available options, and ensure that you make an educated decision, rather than just taking the first, easiest, or cheapest option.

Creating your will too late

A subject that many people find hard to discuss is their mortality, and therefore they will put off creating their will, sometimes until it is too late. This can cause not only yourself more work, and problems, but also your family too.

To avoid making this mistake, make sure that you create your will with plenty of time, should something unexpected happen to you. Nothing is stopping you from amending it later on in life if needed.

There are plenty of other things to consider when you are avoiding mistakes that revolve around your retirement, and old age. But make sure to think about these top tips.

How To Boost Your Retirement Income

Retirement is meant to be a time when older people can finally relax and enjoy some free time. They’ve spent their lives working, and once they reach retirement age, the idea is that they can stop working and have some fun or do things they’ve always wanted to do. This can be hard when you’re living on limited means because you no longer have an income, however. That’s why it’s crucial to boost your retirement income as much as possible, either before you retire or during your retirement. Read on to find out how it can be done. 

Photo by Andrea Piacquadio

Use Your Property 

For homeowners, using your property to boost your retirement income makes a lot of sense. This is likely to be your biggest asset, so why not use it to make life more comfortable when you’re no longer working? 

There are actually a few things you can do in this regard. The first is to sell your home and downsize to something smaller. Ideally, you’ll be able to buy the new property outright and then enjoy the money that’s left over. Or you might consider an equity release scheme or remortgaging – both have their pros and cons, which is why it’s crucial to talk to experts like Reed Pirain about the option that will be best for you. The final idea is to rent out a room. If your children have grown and moved out, for example, you could have a lot of space in the house. Not only will this give you some company, but it will bring you more money as well. 

Make And Sell Something 

If you are good at making unique things, you could sell them on Etsy or Amazon. This can give you a stream of passive income as people buy your products. One good thing about selling things on Etsy or Amazon as an older person is that you can do it from home as long as you have an internet connection.

To get started, you'll need to set up your online store and make an account on Etsy or Amazon. You'll also have to figure out what products you want to sell and find suppliers for them. Once your store is set up, and you have products to sell, you'll need to start marketing and promoting it to bring in customers and make sales.

Pay Off Your Debts

One very important thing to do before you retire is to pay off your debts. This might mean having to take on additional hours or even another job, and at the very least, you’ll need to speak to a loan expert in case it’s possible to consolidate your debts into a smaller monthly payment that will be easier to deal with when you don’t have an income anymore. 

The longer you leave this issue, the harder it will be to make any headway with it, and although it can be embarrassing to talk about money issues, especially if you feel you’ve made mistakes in the past, the truth is that retirement will be a lot more enjoyable if you do take control of your debt and reduce it as much as possible before your income stops. 

Things You Haven't Thought of About Retiring

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For many people, retirement is a time of great excitement and anticipation. But before you start planning the next stage of life, there are some things about retiring that are essential to consider. Here are how physical needs may change and daily financial needs and support system considerations for those who need care.

Your Physical Needs

Your physical needs refer to the physical demands of your body, things like food and water. You will need to make sure that you always have healthy foods on hand for yourself at all times. If you are not non-disabled or possibly this could change shortly, it would be wise to invest in some adaptive equipment now. At the same time, they may still be affordable after becoming disabled when they become even more expensive.

The other side of the coin here is making sure that you get enough restful sleep every night so that your body can repair itself from everyday wear and tear throughout the day. With those two sides covered, then consider your basic hygiene as well - brushing your teeth daily.

Your Support System

Your support system and undue influence of a loved one is essential. Who will be there to support you? Do your kids want to move close enough that they can provide you with the care and companionship you need or are they already strapped for time between their own families and careers? Will one of them have an ageing parent who needs some assistance themselves, so it might not be possible for them to help out.

Possible mentors include:

• Your doctor
• A neighbor or friend who has retired before you
• Family members away from home

If any of these individuals don't live locally, perhaps ask if they would agree to Skype meetings regularly to update each other about life experiences. If your mentor cannot do this due to physical limitations, perhaps they could also participate in an audio chat with you.

Your Daily Financial Needs

Your financial needs are going to change as you age. You will have a lot of options for how you spend your money, but it is essential to consider what those costs could be so that you can plan accordingly.

Retirement calculators are great tools to use when planning out your finances in retirement. These easy-to-use online formulas ask questions about future expenses and income from investments and other sources. They then calculate the estimated annual cost of living for this period based on these inputs, allowing users to determine whether their current savings would cover their projected expenses or need additional plans for funding during retirement years.

How Much Care You Will Need

This is a critical factor to think about when retiring because you will need some form of care. Retirement communities provide a lot of different levels and types of care, and community members are always on-site to help. You can also find home care services in your area, but they may not be able to provide the care you need or have enough staff available for 24/hour live-in assistance.

Conclusion

In conclusion, there are many things to think about when looking into retirement communities. Make sure you also consider your physical needs, daily financial requirements and support system before choosing a community or living situation.