What are the top five retirement mistakes to avoid? There are some retirement mistakes that may have serious consequences in the most vulnerable years of your life. Since the very day we start working, we are bombarded with information about how we should prepare for retirement. But even if retirement day seems like a distant event, you can never go wrong by starting to plan early, or at least avoid some mistakes that may cost us dearly in the future. We tell our subscribers to start saving early and invest their savings smarter than average people. We track billionaire hedge fund managers and their stock moves. Our research has shown that investing in the 15 most popular small-cap stocks among hedge funds outperformed the market by an average of 18 percentage points per year. Two years ago we have started publishing an investment newsletter that utilizes our cutting edge research. In the first two years the 15 stocks we shared in our newsletter generated a total return of 100.4% vs. 48.2% gain for the S&P 500 ETF (SPY). You can download a free copy of our newsletter on this page. Imagine what could happen to your nest egg if our strategy continues to outperform the market at this rate.
Following, we would like to present you with a list we have compiled of the top 5 retirement mistakes you should avoid. Want to spend your golden days carefree? Let’s take a look at the countdown to see what you should and shouldn’t be doing.
No. 5: Overspending early on
You might believe that retirement is like a sort of holiday where you can spend your money left and right and enjoy only the finest things in life. While we should find ways to make our retirement as pleasurable as possible, we should also make sure that we don’t overdo it. Going through your savings early on is a sure way to get yourself into a financial crisis. Given the fact that life expectancies are higher than ever before, you have to ensure that your retirement fund will sustain you for many years to come.
No. 4: Overlooking additional income
Retiring shouldn’t always mean a sudden and complete abstinence from work, especially when you have additional income sources. If you can maintain a part-time job, that is highly recommended. In addition, retirement is the perfect time to start exploring other ways of making money, by capitalizing on your various skills: writing skills, sowing skills, cooking skills, and so on. By doing this, you’ll not only be able to earn a little more money, but you’ll also have something to do to keep you busy. If you are a retiree who can write well and has experience with the stock market please send us your resume.
No. 3: Not considering healthcare issues
One of the biggest expense retirees face are health related and, unfortunately, many people awaiting retirement do not take into account the way in which such expenses will impact their life. The best way to prepare for health-related issues is to ensure you have a sound insurance plan that won’t force you to rely too much on your savings.
No. 2: Retiring too early
It is understandable that after 30 years of working you might need a break. Nobody is saying that you don’t deserve it, but you have to really consider if you are making the right choice. Your savings might not be enough to sustain you for 20 or 30 more years and, in addition, some benefits retirees get only kick in after a certain age. Early retirement should remain a solution only if you are unable to continue working or if your retirement fund is hefty enough to support you for a long time.
No. 1: Not starting planning early enough
Probably the most common mistakes people make is to believe they have more than enough time to start saving up money. But the truth is that you can never start too early. Even if you don’t file for a particular pension or retirement fund in your 20s, you can still open a savings account. The more time your money has to accumulate interest, the more you will have to gain in the long run. One of the smartest people in the world, Albert Einstein, said the following about compound interest: “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
