4 Key Mistakes When Planning For Your Retirement
We all dream of that day. Retirement. Vacations are planned in our head, there's time to tackle new hobbies, and there's plenty of time to spend with grandchildren. If that's your goal, be sure to watch out for the "4 Key Mistakes When Planning For Your Retirement".
1. Being overly dependent on Government and group plans.
In the last few years, we’ve seen adjustments to group benefit plans and this trend will continue in the future. Government plans (CPP and OAS) have changed, then changed back, and will likely change again over the next decade. Based on this knowledge, it’s best to ensure that you save some money yourself, then use government plans and group benefits as gravy on the potatoes, as the saying goes.
2. Putting your current lifestyle ahead of your future lifestyle
It can be tough thinking about where your life will be 10 to 20 years into the future and planning accordingly, but both current and future lifestyles need to be addressed at the same time. Sure it’s nice to have the big home now with two or three cars in the driveway and a nice vacation every year, but that younger person you are today is the same person that will look after yourself in 20 or 30 years.
3. Starting too late.
It is never too early to start saving for your future. The power of compound interest shows that those who benefit most are those who start saving early. A problem arises when you wait to start planning only 3-5 years before retirement and find out that you don’t have enough money to achieve all your retirement goals. With time on your side, start young and you’ll be more successful at achieving those goals.
4. Not having a written plan.
You should know how much you need to save and ultimately what your money will provide for your retirement lifestyle when you get there. You should know all the sources of income you will have and keep up to date with projections to ensure they are on track. An annual review ensures you stay on track with your plans and keeps motivation high.