There’s a huge difference between wanting a successful retirement plan and obtaining a successful retirement plan. We tend to blame external factors as the reason we don’t plan successfully, when in reality, it is all on our plate. An individual’s future financial plan is crucial and without extensive preparation, it will be difficult to achieve. If you find yourself falling into any of the situations below, you can be harming your retirement.
1. Waiting too much time to start saving.
We fall into the assumption that we have plenty of time to start saving for retirement, but that is wrong. The sooner you start to save, the better. It is helpful to think of the action gap when starting to save for retirement. The action gap is when you begin to plan your savings and when you actually begin to save. Waiting to save our money is a big factor as to why we weren’t prepared for retirement.
2. Assuming that you can make up for the downfall with higher investment returns.
This is pretty difficult to achieve because you will never have complete control on investments or the value of your investments. Ways to aim for higher gains include increasing your stock investments or spreading out where you invest, such as technology or successful companies.
3. Saying you know exactly where you stand with your finances.
How can a person say that they know exactly how much money they have made and will continue to make throughout the course of their life? Life occurs and many curve balls can be thrown your way, so it’s impossible to say you know an exact number. One can realistically track their retirement funds by plugging it into a retirement income calculator, but it isn’t completely accurate.
4. I’ll work during retirement.
You definitely should not settle for this. You do not know if the job you will have during retirement will bring you the same income as your previous job or if it will provide you with enough income for living during your time.
Make sure your retirement plan is at the top of your priority list. If you start saving sooner, you won’t find yourself in a retirement crisis later.