Retirement Mistakes Retirement Plan

Retirement planning is essential, unless you plan to work at your company until death do both of you part which may not even be possible. As clearly as we plan, sometimes we do make mistakes. Here are six common mistakes you should avoid

1 – Have no plan whatsoever.

                You won’t be young, healthy or even live freely forever. There will be time when you will need the retirement money and then you will regret for not planning on it. There’s a lot to anticipate and plan for your older age such as health care, living costs and other expenses. A clear plan is needed for your future survival.

2 – Always think that you will not become jobless.

                Some young people do not have a retirement plan as they always sure that they will work at their company for a very long time. They have no fear or being laid and retirement are just for people over 55 years old. To be honest, no one can predict and can tell the future. You can’t be sure that you will have your current job until the day you retire, not going to be sick or able to work for years.

3 – Focus on marriage and their children’s college fund.

                Generally, people will prioritize by putting their marriage first after having career and then start a family. Then as parents, they’ll focus on bring up their children and their education. No it’s not a bad thing. But it will be if you’re not balancing your money. Of course, some people will save money in case of emergency. However, you should realize that that’s not retirement money.

4 – Loaning or Cash Out.

                Your retirement plan is not your savings account. Therefore, avoid borrowing from your retirement savings as it is risky. The money in your savings needs to be accumulated and grow. Taking them out will reduce the interest amount, thus reducing your future fund. If by any chances you leave the company and unable to pay back the loan in full, the amount will be considered as distribution.

5 – Do not anticipate the risk

                Like any other investments, retirement plan also comes with risks which vary from rate of return, stocks, bonds and more associated risks. You may require wise strategies and consider risks that may involve with the plan that you pick.

6 – Do not understand the plan

                It is important for to understand the retirement plan that you choose. You need to understand the risks, the complexity and the advantages of it. Talk to a financial advisor or an expert regarding the plan and understand why you need to pick it instead of just following the herd. Get second opinion from trusted friends and family members.