Top 6 Retirement Mistakes to Avoid

Retirement is a phase which is characterized by expenses to take care of your responsibilities along with fulfilling your aspirations. Retirement is also referred to as the golden years of life, it is the time when you are no longer required to worry about your work and you can live the way you have always wanted. You can explore new places, pursue your dreams, and even move out of your city home to live in the country-side and spend some quality time with your family. 

Top 6 Retirement Mistakes to Avoid

Below are the list of common retirement mistakes which an individual need to avoid- 

1. Not Developing a Firm Retirement Savings Plan

Starting to save for your retirement is a long term activity. You are gonna need to spend most of the years of your life building your retirement savings, which is why it is very important to have a plan in consideration. An immediate annuity plan is one of the financial instruments specifically designed to meet the financial requirements of people post- retirement. The Immediate Annuity Retirement Plan gives you the flexibility to choose regular or lump sum payouts which allows you to look after your expenses such as medical expenses, expenses of child’s wedding and paying off debts. 

2. Not Considering Tax Benefits

Even though it is very important to plan for the future, it is also important to consider your present when thinking about day to day savings. Under the existing regulations of the Income Tax Act 1961, you can avail tax benefits via different retirement plans. 

3. Not Considering Healthcare Expenses

Retirement is the golden phase, but it is also the age where you are most likely to have critical illnesses and health issues. As you approach retirement, the risk of critical illnesses and your healthcare related expenses are also bound to increase. One must consider these healthcare expenses while savings for a suitable retirement plan. 

4. Taking Premature Withdrawals From Your Retirement Plan Corpus

Taking random withdrawals not only halts your overall savings but also affects your tax liabilities. Untimely withdrawals from your policy reduces the corpus saved specifically for your retirement. An option to avoid this would be to plan your investments in such a way that one of them matures right when you approach 40 years of age. It is important to plan your finances for each key milestone between present and retirement, so you don’t have to dwell upon the retirement funds. 

5. Bringing Debt into Retirement

With almost no source of regular income and a limited total of funds, carrying debt into retirement can be hard to manage. Most people plan for the repayment of loans through their regular income sources, so it is necessary for them to plan for the repayment of such debt in the event of their absence. 

6. Thinking it's Too Early to Plan for Retirement

The best time to start investing in retirement plans is as soon as you start earning. Savings and investment plan returns end up being the only source of income in your retirement years. Hence, the sooner you start, the bigger corpus you can build by the time you retire.