Retirement Planning Mistakes to Step Around



Posted on: 23rd September 2020

No matter if you are an early retiree or approaching the ideal retirement age, retirement is the stage of life that offers excitement and opportunity to do things your way, as you can avoid retirement planning mistakes.

However, no matter what time we put into retirement planning Cheshire there are always avenues for mistakes to be made, especially in being underprepared. In order to have a successful retirement and comfort in old age you will need a decent pension in play.

To look over some of the most common missteps in retirement planning, you need to know how to overcome them. Here we look into a few of the more prominent ones.

Straying Off on Saving

It’s no secret that putting off your pension saving is one of the biggest misconceptions there is.

It may be never too late to start but the fact is the sooner you start saving the more you’ll have when you need it. Putting off until later is simply adding to the amount you’ll have to put away each month later on. There is a significant contribution to be made the later you leave it. If you leave it until your mid 40s you can see yourself needing to save over £700 a month just to receive an annual pension.

The State Pension Belief

Too many fall back on the belief that the UK state pension will be enough to live off of in retirement. It’s not.

Although it has increased over the years, the bad news is that it’s not enough money to be comfortable in retirement and you have a long wait to reach that with retirement income set for age 67 by 2028. It’s a long road for not a lot.

Understating the Retirement Cost

Not understanding your retirement needs financially is among the chief mistakes to make, leaving you with a retirement shortfall that could mean you return to work or have to sell assets such as your home in order to fund retirement. That is a huge blow to someone who should be enjoying their twilight years.

Basic living expenses should be covered critically on top of certain luxuries as holidays and a car. You need to understand how the standard you live by compliments your retirement plan and how much you currently earn to be able to achieve it.

Property Reliance

Investing in property alone leaves your savings within the hands of the property market. If the market crashes, your retirement funds are set to be dealt the biggest blow.

Being reliant on equity in your own home, you should be aware of the presence of downsizing which can have its own expenses and not always straightforward and easy.

Losing Track

If you are unawares of who your pension providers are then you don’t know what is happening in regards to them. You can stand to lose track of these pensions all together and the money involved if you don’t have an understanding of them.

Pension pots could fall into poorly performing funds that don’t maximise what you build within them. You could also fall foul of hidden pension charges which negatively affect your pension making them decrease in size upon stopping paying into them.

To help step around these minefields that affect your retirement plans, contact Haven IFA, best independent financial advisors UK to discover how to safely navigate the road to comfortable retirement planning and living and avoid retirement planning mistakes.