The 5 worst retirement planning mistakes you are probably making

As a financial planner, I find it really encouraging seeing clients who are well ahead of the game when it comes to understanding their finances and income security. Retirement planning seems to be something that many people are considering earlier on in their lives.

That said, I am surprised that many people aren’t clear on some of the basics about what living in retirement means for them.

Here are what people are doing wrong:

  • Failing to Plan

I’m not just talking about paying off a mortgage and topping up the super, I am talking about not understanding that living on the aged pension will not cut it when they are hitting retirement. Covering off your long term goals while addressing your super, investments, insurances and budget is just the beginning. And that needs to be done yesterday.

  • Not budgeting correctly

No one likes the ‘Money Police’ but when you take a long hard look at your personal and business expenses, there will definitely be some fat to trim. And with that fat – invest it.

  • Investing in diversity

Banks are ok for day-to-day banking. Other investment options might be better. Shares and property will give you a better long term offering and generate capital growth. It may even be more favorable come tax time.

  • Freaking out about your choices

Riding out the waves of investing can be challenging for many people. If shares are your thing, take minor blips in your stride and stick with the long term strategy. Selling will only cost you more money in the long term.

  • You left it to the very end

Don’t leave the planning and the sacrificing until you are 60 years old. You may not be in a position to increase mortgage repayments, top up super or invest when your body is breaking down and you are mentally ready to slow down.

If individuals want to live well in retirement, the onus is on them more than ever to start saving as early as possible, establish their retirement goals, to evaluate the myriad of investment options and be aware of the risks involved.

At the same time, with this greater investment complexity, it’s also possible for investors to get confused and make mistakes that can affect retirement savings.

A great way to manage the quagmire of financial freedom towards retirement is to seek advice from someone that can help you.


7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
October 18, 2017