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Planning Your Finances

What NOT To Do When Planning Your Finances During Retirement

Preparing for your retirement entails preparation in many different aspects of your life. Be it adjusting to a new schedule, budgeting, or making the most out of your social security or retirement fund—everything about retirement requires planning.

On top of getting acquainted with the means to which you can maximize your current, limited financial resources, you should also be in the know about what NOT to do to complement your retirement financial structure.

Making your savings last through your retirement may not be as easy as you think it is. As you retire, you will have more time to spend on things like entertainment and food—which means more expenditure on your end. However, knowing about the financial pitfalls that could entrap you will definitely help.

  1. Do Not Assume a Conventional Retirement. The kind of life you lead after your own retirement could be far too different from what you imagine it to be. With this, it is important to actually think about what you want out of your retirement years. Think about what you really opt to do during your retirement so you can better plan your finances ahead.
  1. Do Not Buy Funds with Low Expected Returns or High Level of Risk. Examples of this include commodities, technology, and gold stocks. More so, it will be good to steer clear of pure growth funds, including U.S. funds and International funds.
  1. Do Not But Actively Managed Funds. These funds incur higher expenses than index funds while not yielding returns that are higher than the latter.
  1. Do Not Get Stuck Up with a Funds Guru. Note that no one knows for sure how the market is supposed to perform in a few weeks/months or even days from now. With this, it’s important to not trust and invest all your funds with a single professional/entity.
  1. Do Not Gamble With Your Portfolio. It will be best to have a diversified portfolio to maximize the opportunities in the market. Playing the market will most likely reduce your long-term returns.

In the event that you are the type who likes to gamble though, try your luck on nothing more than a lottery ticket instead.




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