6 Retirement Planning Mistakes to Avoid in Your 50’s
Retirement planning is one of the most overlooked aspects of financial planning in India. However, with increasing life expectancy, retirement planning is extremely important. When you start to invest early you can reap the benefits of a significant corpus. For most of us our 50’s are a milestone age and the last chance to get our finances in order.
These are some of the common retirement financial planning mistakes that people make in their 50’s to watch out for and avoid.
1. Expecting to work past your retirement age
A lot of people fail to properly execute the retirement planning process because they think that they will work beyond the age of 50. But due to other circumstances, many people get laid off sooner than they expect. Issues such as layoffs, health issues and family circumstances cause people to retire earlier than planned. It can be incredibly difficult to find a new job if you are laid off at this stage of your life. This is why it is better to start with an early retirement plan. Whether you work beyond 50 should be your choice and not compulsion that life makes you do.
2. Taking too little risk or too much
You might start getting conscious of the fact that time is running out and take too much risk by putting money into speculative investments to get a quick return on investment. This could lead to big losses when you least expect it. Create an investment strategy based on your goals, aspirations and concerns, and then invest accordingly. This could be a very crucial part of your overall retirement planning process in the years to come.
3. Carrying forward credit card debt
If you have any credit card debt, it should be your foremost priority to pay it off. Ideally at this stage, the only debt you should have is your mortgage so that you can focus everything on funding your retirement. Being able to financially independent in your retirement years is extremely fulfilling.
4. Taking on college debt
If you have children who are about to go to college, then you might feel compelled to financially help them out with paying off college loads. But taking out any additional loans in this stage of life could be financially debilitating. College loans can put a significant strain on your monthly cash flow, especially if you are on a fixed budget.
5. Living the same lifestyle
Post retirement, there will be some minor adjustments you will need to make to your lifestyle in order to live prudently. If you need to downsize you lifestyle start sooner than later and explore long term investment options early on that would reap its benefits when you need it at a later stage in life
6. Insufficient health coverage
Opt for a comprehensive health insurance policy that safeguards you against any health emergency, such as hospitalisation, accidents and critical illness. This comes in the most handy in unforeseen circumstances and doesn’t cause a huge dent to your financials.
Opt for an early retirement plan like the Aviva Annuity Plus plan and get guaranteed payouts for life. There are several key benefits of a retirement plan such as this one. It gives you an annuity amount guaranteed for the life of the policy as well as 7 annuity options to choose from. [UIN:122N018V04]
Aviva’s retirement insurance plans are among the most trusted and reliable. Choose one that best suits your needs.
AN July 13/22
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