- April 19, 2019
In 2016, American couple Justin and Kaisorn McCurry were featured as a CNBC success story. The couple both retired in their 30’s with over $1 Million dollars. The McCurry’s, who are said to be living “their best lives” attributes their early retirement to “steady saving and investing”. That’s right. No winning lottery tickets. No inheritances. Just an average couple with a disciplined course towards a retirement goal.
While early retirement may not be for everyone, enjoying your retirement years should definitely be the ultimate objective. This involves a strategic financial plan that includes a diversified investment portfolio as well as careful avoidance of common retirement planning mistakes.
Common Retirement Planning Mistakes
According to RF Pensions AVP, Cleora Farquharson, there are three common mistakes that could have a significant impact on the quality of your retirement:
1. Failing to plan: While this sounds like a given, there are some persons that believe retirement is in the distant future and don’t make planning for it a priority. Then there are those that don’t plan enough. While they may make monthly contributions to a pension plan, they fail to think about the amount of money they actually need to retire and run the risk of a shortfall when they do. A good start to retirement planning is to answer these questions:
- What do I want to do during retirement? Should I save for travel or hobbies?
- How much will I need to cover my expenses?
- How much will I need to reach my retirement goals?
- How much should I put aside a month to get there?
2. Not planning soon enough: As a 20 something year old starting out in your career, the last thing you may be thinking about is retirement. However, this is the perfect time to begin your retirement planning. The sooner you start saving towards your golden years, the more time your money has to grow, especially if it is invested in a pensions plan that gives good returns.
3. Borrowing from your future: The money in your retirement fund is there for one reason only: to provide for your retirement. A financial bind today will be nothing compared to what you could experience at 70 or 80 without sufficient retirement savings. Although you may have no other alternative than to borrow from your retirement savings due to a financial crisis, you should never do so without speaking with a professional financial planner.
Everyone can’t be the McCurry’s who retired in their 30’s. But everyone should make conscious steps towards creating a more comfortable retirement. Speak with a financial advisor to determine the best course of action for you.