Five don’ts of retirement planning and how they’re tarnishing your ‘golden’ years

Karin Iten, Fsp Invest, 07 Mar. 2014

Tags: retirement planning, don’ts of retirement planning, retirement strategies, best retirement plan, retirement, retirement savings

“The concept that everyone retires in their mid-60s and never works again is obsolete,” former financial planner Gary Foreman. The earlier you recognise this and make changes, the bigger the big differences you’ll see when you retire. And one of the things you need to change RIGHT NOW is your mindset. It starts by making sure your retirement strategy isn’t making on these don’ts…

Small differences today will help bolster your retirement

“There’s no one single thing that you can do to guarantee a comfortable retirement. But there are a number of lifestyle choices and decisions that you can make that will make a big difference in building a retirement nest egg,” says Foreman.

So will avoiding these don’ts…

Start poor, retire rich!

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Don’t let these five retirement planning don’ts stand in your way!

1. Don't let pride get in your way: If you’re the kind of guy who likes to own an expensive car and trades up often, slow down. It’s “better to buy a vehicle with lower status and keep it until repairs exceed the value of the car,” says Foreman.

2. Don't let your kid’s education deplete your retirement savings. As South African Investor Chairman, Warren Jeffery warns: “Your child’s education could cost you your retirement!  Putting two children through school will knock your retirement savings by about R7.6 million – and that’s a government school. (Private schooling will knock off a massive R27 million from your retirement nest egg.)” You need to plan for these expenses accordingly.

3. Don’t live “large” today only to live “small” tomorrow. These days, we’re all about luxury and we want it RIGHT NOW. We’re not afraid to rack up credit instead of waiting until we can afford to buy something cash. This is dangerous thinking! Every cent you spend paying back something you didn’t need, is a cent you lose from your retirement savings.

4. Don’t underestimate your target. Sit down, do the maths and get your retirement planning right. If you’re not planning for the right retirement target, you won’t ever have enough money to retire in comfort. (These three steps will help cement your retirement strategy.) 

5. Don’t think about retirement they way your parents did. You still have at least 20 good, healthy years to pursue another dream. So consider what your retirement will look like: Will you run a franchise, consult to previous clients or downgrade to a smaller house? When you can picture your future, you’ll be able to plan for it.

There you have it. Five retirement planning don’ts you must avoid. If you don’t, you could end up in a nightmare instead of the golden dream you’ve always desired.

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