If you have already started planning yours, it is important to review your plan from time to time to make the necessary adjustments according to the annual circumstances. Assuming that no retirement plan is error-proof, we are going to review some of the most common mistakes that, if not identified in time, can become a headache. We delve deeper into this below.
Not planning ahead
The most common mistake is to leave retirement “for later” instead of taking action several years before the due date, so that we can take action and guarantee ourselves a solid economy for those years of retirement. It is important to estimate the amount that we will receive based on what we have quoted, assess the expenses that we will continue to have, and evaluate whether a complementary is necessary that allows us to guarantee better income.
Planning our retirement and not reviewing the plan periodically
The economy is changeable and subject to events beyond our control, so adequate budgets for one year may not be adequate for the following year. Under the same criteria, retirement plans (economic estimates, budgets, expenses, debts) must be reviewed and readjusted annually , so that the figures are consistent with the economy of the moment. If we don’t do this, we run the risk of being surprised that the money we used to have is no longer enough to cover basic expenses.
Another common retirement mistake is not saving or delaying the start of a savings plan too long . In fact, the advice of the experts is to save from the beginning of our working lives , although it is understandable that it is not always possible to maintain a fixed savings quota. The great advantage of starting to save as soon as possible is that it will be easier to save small amounts in the long term than large amounts in a short period of time. The more we delay, the less benefits we will receive from them.
Within the economic plan to be prepared, it is vital to contemplate the expenses that age entails, be it health, housing, transportation and even debts. If you have previous medical conditions that require long and/or expensive treatments, you must take this into account to calculate the budget you will need. On the other hand, you cannot underestimate your life expectancy either, so it is always better to do the calculation taking into account that you will live several decades more than to do it thinking that you have little time to live. The differences between one option and the other are abysmal.
retire with debt
The third most common mistake is opting for retirement while still having debts to pay off, be it mortgages, vehicles or credit cards. The smartest thing to do will be to settle any outstanding payments you have while you have the salary, benefits and other economic benefits that a permanent job offers.
Not having your spouse
The last mistake that is usually made is to make the calculation or planning without taking into account the expenses of your partner , in case it is planned that they accompany each other during the retirement period of both. The pension you receive must be sufficient to cover the expenses of both and, if it is not, the pension plans and other financial products acquired to guarantee a comfortable pension must be calculated taking into account the expenses of the two.