1. Delay starting to save for retirement
If you delay starting to save for your retirement, the more it is going to cost you each month to create a meaningful sized pension fund. This is because of “Compound Interest”. The longer money is invested the great the effect of “Compound Interest” on the money invested. For every 10 years you delay starting to save, this will reduce approximately 50% of your pension’s funds potential growth,
2. Not saving enough for retirement
The single biggest factor in saving for retirement is how much you save. According to statistics the average person would like an income of £467 a week; however the average male pensioner only had an income of £304 a week in 2008/2009. That’s a gap of £163 a week or more than £8,000 a year.
3. Not reviewing your pension fund
The sad fact is the vast majority of people who have a pension rarely or never review their pension investments. This is most likely because they don’t know that they can do it or how to go about doing it. A review is important to check what level of risk you are taking and how your investments are performing.
4. Doing nothing and relying on an Inheritance
More and more people are relying upon an inheritance to pay for their retirement. This may be a big mistake. Firstly we are all living a lot longer and it’s quite possible that our parents may live beyond 100 years of age and any inheritance may not be received for a long time to come. Secondly, more and more people have to pay for either care home or nursing home fees. So it’s possible that you may not receive an inheritance after all.
5. Relying on your home to fund your retirement
More and more people are turning to property to fund their retirement, however like any investment property can fall in value as well as rise and many people have lost money in property investments. Secondly if all of your investments are invested in property, then all of your eggs are in one basket, which is not necessarily a wise strategy.
6. Not joining your employers pension scheme
Not everyone joins their company sponsored pension scheme. Many employers offer to match your contributions up to a certain level. So by not joining the company scheme you are in effect giving away free money that could be being invested for.
7. Assuming the state will provide for my retirement
Basic Old Pension for a single person I a little over £100 a week and last year nearly 20% of people retiring were solely reliant on this for their income in retirement. This level of income is hardly enough to be able to survive and the reality is that the State is in no position financially to be able to provide State Pensions that would be anywhere near enough to live on comfortably. The State simply does not have the recourses to be able to do this.
Talk to us about making sure your retirement is a comfortable and enjoyable one.