Retirement is something many people look forward to as it allows stress free living and time to reflect back on ones life. This might be true for those who have saved substantially during their working life. However, for those who have not saved plenty, or those who have no idea about how to manage their savings, this might just be another dream. Therefore, knowing the ways, which can ruin your retirement, shall prevent the same thing from happening and thus allow a person to live the stress free retirement they have always dreamed of.
Due to various reasons, many consider retiring early with many years of working life still at hand. Although this seems like gaining a chance to recap what he or she had missed, it actually reduces the potential savings one should be having if one worked for the full quota of his or her working life. This also means that the person will have to withdraw from his or her savings rather early and therefore have to face an uncertain future in the latter years.
-Making lavish expenditures soon after retirement
It may be no wonder why people want to spend so much money for their dream home or the dream vehicle from their savings as they retire. Although this may be thought of as a reasonable wish, it may not be a financially wise decision. Making large withdrawals for such spending that may not draw much value when it sold later should be avoided if the retirement savings are to be preserved for emergencies. Such emergencies may be rather hefty, as in the case of medical bills and therefore it is necessary to expect them as forthcoming.
-Taking too much risk in investments
It may be very easy for someone to be louvered into investing in a high-risk derivatives or small cap stocks when they are not experienced in doing such investments. Although the return might be good in some instances, such investments lead to more losses than gains in most occasions.
-Taking too little risk in investments
Similar to making high-risk investments, doing investments, which are low risk, could also jeopardize the ability to improve one’s retirement savings. These include savings in CDs, treasury bonds etc which may be safe but will fail to yield much at the end of its life span.
-Keeping hopes on the retirement benefits
It is always possible for an organization to cut down on the retirement benefits as means of cost saving during trouble times. Thus, the retirement benefit may not be a regular income gainer for all throughout the retirement life in some instances. Therefore, having other means of retirement savings is a must for anyone wanting to live a stress free retirement life.
-Counting on the spouses retirement benefits
Although it may look like a prudent idea, each one should have his or her own retirement fund than relying on someone else. This is true when death and divorce can ruin the hopes of such persons and therefore one should start planning for their retirement fund at a very early age.