Don’t go broke in retirement – Avoid these 7 mistakes

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Why do you hustle every day at work? Many of you might build a nest egg for the golden years of life and work extra daily for a secure future. Your retirement should be the beginning of the golden years of your life, wherein you can reap the rewards of your active working years. If you don’t save adequately for your retirement, your retirement period can end up in the most stressful period of your life. Before you accumulate your retirement savings, let’s go through the top seven retirement mistakes that can disrupt your financial well-being after retirement:

broke in retirement

Avoiding retirement planning

The usual retirement period in India is between 55 and 60 years. Although your retirement might seem far away, you should start planning as early as possible. Retirement should not be an impulsive decision. It should be done with much thought and advanced planning. A well-thought-out retirement plan can help you live a comfortable lifestyle in the long run.

Focusing only on achieving your post-retirement goals

Many of you might take retirement to live peacefully at home or accomplish your post-retirement goals like pursuing an interesting hobby, traveling, etc. While fulfilling your post-retirement purposes can be essential, you should not forget your family’s financial security after retirement. As the family’s breadwinner, identify your loved one’s needs, consider your dreams, and plan your retirement accordingly.

Choosing to retire too soon

Today, retirement might not be about the age you choose to retire anymore. However, choosing to bed at a young age without proper planning can drown you in a financial crisis. If you plan to bed at a young age, you should know how to bed early to ensure you have enough resources to maintain your current lifestyle even after retirement.

Availing only health insurance

As you age, the severity of diseases can be relatively higher than a young age. You might be prone to health conditions like kidney failure, cardiovascular diseases, etc. Although having a health insurance policy can be beneficial at this age, you should not depend on it. Many insurers might not cover specific healthcare conditions like dental or eye care.

Depending solely on your income

You would have accumulated funds during your active working years to live a stress-free retirement. However, it would help if you did not depend solely on your hard-earned savings after retirement. You should purchase a pension plan to meet your routine and household expenses. A retirement plan is a retirement plan that offers regular retirement income to fulfill your financial requirements after your retirement.

Dipping into the emergency fund

Due to life’s unpredictability, you should create an emergency fund to tackle any unannounced contingencies like medical emergencies, loss of income, physical disability, etc. An emergency fund can be the additional earnings specific to handling life’s eventualities. If you use the emergency fund to meet your goals, like purchasing a new house or a car during retirement, you are more likely to risk your financial health when an emergency arises.

Investing in the capital market rigorously.

Investments can allow you to grow your corpus and earn interest in return. However, it would help if you did not risk your invested capital at an older age. As you age, you should avoid actively participating in the stock market. Since you might not bear the market risks at an older age, you should invest in debt funds.

Although debt funds offer relatively low returns, they are less risky than equity funds. In a nutshell, retirement can be one of the most crucial milestones of your life. Seek professional help before you start your retirement journey. A financial expert can guide you through retirement planning by avoiding the abovementioned mistakes.