Retirement Finance 101: Common Mistakes to Avoid to Ensure a Happy Retirement


For most people, retirement is the time for enjoying the fruits of one’s lifelong labors. Retired workers often look forward to finally having the time for engaging in leisure, pursuing long-cherished dreams, and perhaps even learning a new skill or two. And ideally, they should be able to do all that without worrying about the bills.

Unfortunately, certain changes to the socio-economical landscape over the past few decades have resulted in less-than-ideal retirement scenarios. According to STK Finans, some senior citizens have even resorted to staying employed in their seventies, as the skyrocketing costs of providing for their children depleted their retirement funds.

Still, having the means for a long and happy retirement isn’t impossible, and those who aspire for a comfortable retirement would do well to avoid common pitfalls, such as:

Not planning for retirement at all.

Pretty much all hardworking employees look forward to a comfortable retirement. However, very few of them actually take the time to sit down and calculate how much post-retirement living would cost exactly. Before taking any further steps towards one’s retirement goals, it is crucial to come up with at least an approximate amount needed to ensure a long and comfortable retirement.

Apart from the inevitable medical bills that come with old age, aspiring retirees should also factor in the yearly inflation rates, the remaining mortgage payments on their current residence, daily living expenses, the cost of providing for other dependents (if any), along with the costs of any leisure activities (i.e., traveling) that they might want to pursue during their retirement.

Waiting too long to start saving for retirement.

Saving for retirement is just like developing a good skincare routine: it is never too early to get started. The economic upheavals of the past decade have resulted in millions of workers with greatly-reduced retirement pensions, and for many of them, it is already too late to remedy the situation.

Saving up for retirement at the start of one’s working life is highly advantageous. Doing so allows one to explore other options to accumulate retirement funds without taking on too much risk. For instance, a 25 year-old worker would have a better chance at riding out the volatilities of the investment market, as opposed to a 50 year-old doing the same, even if the latter were to invest bigger amounts than the former.

Retiring with a high amount of debt.

The average employee accumulates a significant amount of housing and/or credit card debt over the course of their working life. But for their retirement to be worry-free (at least on the financial side), they should pay off the bigger debts and leave only those that can easily be shouldered by their retirement income.

Relying entirely on government or Social Security pensions.

While most companies and employers provide their workers with pensions, it is a grave mistake for aspiring retirees to be completely reliant on them for their retirement needs.

It is advisable for employees to be fully aware about the amounts that they will receive upon retirement. Given such, they can determine if the amount will be enough to cover their projected expenses. In case the amount would prove insufficient, aspiring retirees can take the necessary steps to address any anticipated financial deficiencies or gaps (e.g., by exploring options that will result in additional income, etc.).


Will you keep in mind these common mistakes to avoid to ensure a happy retirement for you?


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