23 May 2017

Retirement Planning Pitfalls - don't make these mistakes

Financial planning for retirement is pretty significant, given that decisions made are likely to be with you for the rest of your life - perhaps 30 years in retirement.
 
But there are some common mistakes and misconceptions which could cost you. Here's some of them...

1. Ignoring inflation - it's not very significant at the moment but the long term average in the region of 2.5% means that halfway through a typical retirement a fixed income will only be able to buy you two thirds of what it did at the beginning, and only half after 30 years.

2. Expecting to die young - most people seem to expect to die prematurely! In practice that runs the risk that you run out of money too soon.

3. Not expecting to die! - a Will is an important part of the planning process and avoids causing your family problems. If you are retiring you should certainly have an up to date Will. A Lasting Power of Attorney is also well worth considering.

4. Over-reacting to short term economic changes

Understandably I am often asked about the likely effect on investments of the latest economic or political news. Without wanting to appear blasé and unconcerned my normal response is "don't worry about it". You certainly don't want to sell all your investments to cash at the first sign of bad news, and usually the best thing to do is just sit tight.

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