At 50 years, a good part of your life should be solved or at least on track. Of course, good retirement planning still makes a difference.
At this time you should have already made key decisions such as paternity or buying a house. There are actions that will help you to have the retirement you dream of and others that will definitely take you away from it. If your life is in New York, for example, it is logical that you think of the capital as the place for your retirement.
However, if you have the flexibility and do not mind changing your place of residence you can earn a lot when you retire.
Here is a review of the most common mistakes when planning retirement and what to do to avoid them.
Risk more than you owe
Your vital priorities change over time and so should the way you invest. The time to risk is when you are young.
As you turn years it is important that you learn to protect the heritage that you have been creating. In other words, reduce the percentage of your savings that you allocate to the most volatile assets, with more risk.
Think in the short term
In line with the above, at 50 it is easy to think that retirement is just around the corner and focus on the short term. However, there will still be 17 years until reaching the legal retirement age. That is, a lot of time to limit yourself in the short term.
Those commissions eat your savings by changing plans or funds
In the months of October, November, and December, it is usually raining offers to move the pension plan to another entity. The hook to transfer the pension plan is usually a gift. From televisions to Tablet PC and even 4% of the transferred capital. Anything goes.
To think that there are only pension plans
The pension plan is the product of retirement savings par excellence, but not because it is the best. In fact, there are things about the pension plans that nobody tells you and that you should know about.
Not having an expert to accompany you on the road
As you have seen, it is easy to fall into mistakes when investing your savings and ruining your retirement. All this might get resolved by having an expert to accompany you and help you achieve your financial goals.
Withdraw too soon
Who doesn’t want to retire at 55 instead of 67? Most people see retirement as a period of enjoyment and leisure according to the Direct report. That is why 29% of people would like to retire between 56 and 60 years and 38% more between 61 and 65 years.
You underestimate the costs that you will have
Along these same lines, one of the typical mistakes when planning your retirement at 50 and later is not being sure what your costs will be.
It’s easy to anticipate what you can spend at age 65, but more complicated to know the costs you’ll have at age 85. Most people be liable to misjudge how much their preservation will cost, partly because of ignorance and partly because they do not foresee or admit physical decline.
Overstate what you can do with your pension
Simply thinking about the cost of a residence you should already be clear about the limitations of your public pension. However, most people will tend to think that money will give them much more.
Save too little
Since most do not know how much money you will need when you retire, you underestimate expenses and overestimate income. This translates into saving too little for your retirement.
Do not plan a golden retirement
The above figure is an average of what you will need to maintain your standard of living. But as you have seen, most people associate retirement with leisure and enjoyment. And it is that when they stop working they finally have the free time they so crave to devote to their hobbies and interests. Surely you think so too.
Use the pension as a savings account
One of the characteristics of pension plans is that you cannot recover the money until you retire. In fact, this is one of its disadvantages compared to other products such as investment funds.
Think more about the children
Another common mistake is to stop planning for retirement at 50 to help children. It is very common for parents to give part of their savings to their children, but it must never be at the expenditure of their financial freedom and long-term savings.
Do not take advantage of housing to live better
You can start with the house and finish with it. The house and place of residence are one of the greatest resources of any person and also the most wasted.
Avoid these mistakes and you will be able to achieve the necessary financial freedom when the retirement arrives. That way you can enjoy the retirement you want.