At the start of our working life, it would be fair to say that the majority of us completely disregard the thought of retirement. After all, this is the first time in life we are earning a continuous wage – and now is the time to enjoy it, right?
Well, to an extent, the above is true. After all, we all need an injection of fun in our lives. At the same time, let’s not forget that there is something of a retirement crisis doing the rounds. The media have jumped on the back of it, and there is a big fear that people are going to retire and struggle to survive.
While we can’t answer every issue, today’s post is going to look at this topic in a bit more detail. We will now look at some of the things that you shouldn’t do – even if retirement might be decades away.
Mistake #1 – You only think of current expenses
Like a lot of the mistakes, we will cover, many of these are expected. After all, with retirement years away, why should we care about what costs might be around corners in the future?
Well, it’s good to be aware. A lot of people approach retirement thinking that their mortgage has been paid off, and that will make life much easier.
What they forget is that there are other major costs to contend with. These include the costs of elderly care, and as morbid as it might sound let’s not forget that funerals don’t come cheap. Start to think about these expenses to gain a rounder picture of what retirement means.
Mistake #2 – You don’t consider your pension
This again relates to the notion of living in the present. A lot of us see pensions as an unnecessary expense; they blight our pay packets, and we would rather not contribute.
Suffice to say, don’t fall into this trap. This is an invaluable tool in your bid to retire comfortably, and you should be looking to maximise the opportunity with your pension. Don’t forget that employers typically match what you contribute and when one also considers the tax benefits, this is almost like free money.
Mistake #3 – The expenses don’t stop when the kids leave home
We’ve all seen studies on how much children cost over our lifetime, but it could be said that they are starting to cost a lot more.
Parents are starting to back their children in the housing market, for the simple reason that it’s becoming far too expensive to put down a deposit for a young person.
Sure, you are not obliged to do this, but it is becoming more normal so to speak and should be something you keep in mind.
Mistake #4 – You pledge your faith in others
Unfortunately, this last mistake is what a lot of people have been doing over the years and are now becoming unstuck. Sure, the authorities try to look after you whenever possible, but this is becoming an increasingly difficult task. The population is growing, and arranging sufficient amounts of elderly care and pensions is no easy feat.
Nobody knows what the situation is going to be like in a couple of decades, but based on history, plan for the worst and make sure you are doing everything in your power to keep control of your retirement.