Retirement Planning: Five Traps to Avoid
Everybody has to plan for retirement, because it comes to us all. The best planning takes place as early as possible, because not only does this mean that you have been preparing for your retirement for a longer period of time, but it also means that you will be able to have a firm grasp on what is happening. There are problems with retirement planning, however – there are a lot of people who take advantage of people and their need to find somewhere to put funds. They will do a lot to get their hands on that money, even to the point of running multiple scams to ensure that people don’t twig to their ideas.
There are a lot of traps to fall into when planning a pension – read on for five of them that are unfortunately common.
1.Not reviewing your pension.
Getting a pension isn’t simply a matter of setting one up and then sitting back. You need to keep up with it, and keep yourself up to date with what is happening. What if changes have been made to the account which limit the amount of money that can come in each year? What if you can save more money each year? You won’t know about these things unless you keep yourself up to date with the pension, and keep an eye on what can and cannot happen with it.
2.Don’t underestimate your own longevity.
Maybe in the days of our grandparents it was the norm to work until sixty five and then die, but it isn’t the norm today. Don’t assume that you will be the same – if you live to fifty five, chances are you’ll still be around in your eighties. With this in mind, make sure that your pension will stretch to cover your lifespan. This is one reason to start your pension as quickly as possible – the earlier you start it, the more money will be saved from it.
3.Remember the cost of living.
Cost of living is very high, and it is only likely to get higher in your retirement, partly due to costs rising, and partly due to you not having a steady income. Remember that the pension is your income for the rest of your life after retirement. Unless you are able to find some way of propping up your retirement fund, the money you have saved is the only cash you have.
4.Don’t Overestimate Investment Returns.
Somewhere like www.hensoncrisp.com can really come in handy here. Make sure that you don’t overestimate the amount of money you have squirrelled away in an investment, because that investment may not be as much as you thought it was. Perhaps the terms of investment were good when you first set it up, but they have changed since? You need to keep an eye on things, otherwise you will not have as much money to work with as you thought.
5.Don’t use your house as your pension.
Don’t use your house as your pension. It might burn down. It might have to be sold. It might just decrease in value. It isn’t guaranteed in the same way as other pension-related investments are, so don’t rely on it.