Financial Mistakes to Avoid in Your 50’s

Financial Mistakes to Avoid in Your 50’s
July 19, 2017 K Compare
FINANCIAL MISTAKES TO AVOID-Karlocompare

Retirement turns into a looming threat for a lot of people as they enter the last decades of their working life. Be that as it may, how can one guarantee that they aren’t broke when they reach retirement?

This point in your life may be classified as the point where you consider and consolidate your nest egg to ensure you have enough to live on when the time comes to finally stop working full time (though, nobody can stop you from working if you would rather continue!). Let us describe some of the key mistakes you should avoid in your 50’s to make sure you don’t spoil the fruits of your labor!

  • DO NOT MISCALCULATE YOUR LIVING EXPENSES:

Before you retire, it’s crucial you see precisely the amount you should accumulate for your retirement. In the event that you don’t have enough, you’ll either need to reevaluate your expenses or get occupied in compensating for any shortfall – through full time work, teaching, or by any other means.

This is applicable in cases where people do not have a clue as to the amount they would need on a monthly basis for their sustenance. In an ideal situation, you could start off with writing down all your expenses on a daily basis for a few months, and then use that as a guide to estimate your cost of living. Also, factor in the amount of money you may need to cater to any expenses that your organization is taking care of, for example, medical costs.

  • DO NOT OUTLIVE YOUR RETIREMENT FUNDS:

While your income and your savings may be looking incredible when you resign, it is probably not going to remain as such. You should consider any additional costs that you’re incurring today that you may not have factored in. For example, bank charges, fuel, etc. that are part of your daily life but will eat away at your savings once your regular income is not coming in. Also consider, market impacts on your funds as the market rates fluctuates daily and especially in a place like Pakistan. By market, we mean the economy and the conditions within the economy, including interest rates, stock market returns, and inflation rates. Considering how Pakistan’s economy is always fluctuating, it can be difficult to manage funds in a way that you and your family don’t outlive them. Therefore, you should be careful and consider all the stakes while they retire. This includes considering the amount of savings you have,inflation, evaluating market conditions, diversifying investments, and evaluating amount of money you would need every month to live off of.

  • DO NOT RELY ON PENSION PAYMENTS:

You may feel that pension is accumulated exactly for this reason, to retire comfortably. But don’t be fooled. You may be able to provide for your basic needs during retirement, but don’t expect to live comfortably. Bear in mind that it is never too late to take control of your financial future by saving and investing a substantial sum. How does one go about doing that? By saving up and investing month by month. If you know the amount you would need every month to run the household, then plan out the final investment nest egg you need and start planning your investments today.

  • DO NOT KEEP ALL YOUR EGGS IN ONE BASKET:

Whilst many advisers recommend having your funds in one place pooled up during your retirement phase, it is always believed that it’s important to hold a good spread of investments so that the risk is diversified. Why is risk diversification necessary? Have you heard the news lately? Heard about the fluctuations in the stock market? If you had all your money in the stock market right now, it would have been disastrous, however, had you diversified, say in mutual funds, and in savings accounts, etc. you would still have a portfolio to live off of. Diversification can help you spread your risk across different investment mediums and thus continue to earn returns if one of the investment mediums fails to give you returns.

  • TAKE CARE OF YOUR HEALTH:

This is a common mistake that individuals in this age bracket make. This remains constant for any age, however, once you’re in your 50’s, health is critical. Any small health problem can escalate into a bigger one due to age – which means more expenses to bear in the longer run. Keep in mind that medicinal costs increase drastically with age. The key to limit future hospital expenses is by putting resources now into a solid way of life which includes proper eating lifestyle, diet and exercise so that it may be beneficial for the years to come later on.

Learn the best ways to invest your hard-earned money in avenues that will continue to give you solid returns. Also, evaluate how you can stabilize yourself and your family’s well being – this can range anywhere from finding the right car and house, to establishing a source of passive income, and ensuring everyone remains in good health by practicing preventive health care.

Comments (0)

Leave a reply

Your email address will not be published. Required fields are marked *

*