3 retirement mistakes you should avoid
While saving for your retirement there are chances of committing a few mistakes. Though there is no perfect way to plan your retirement as all the numbers are derived from certain assumptions; however, avoiding certain mistakes could potentially help you to accumulate some wealth and possibly help you to financially sustain your retirement period. So, following are some of the mistakes that you should strictly avoid.
Withdrawing EPF balance
Before turning 58, one can withdraw the complete balance of Employee Provident Fund (EPF). It is a trend seen in our country that people, before moving to their next job, withdraw their EPF balance completely, rather than carrying it forward to the account with the new employer. This defeats the actual purpose of having an EPF account. EPF contributes towards building your retirement corpus. In terms of risk and returns also, it is an attractive bet compared to other debt investment avenues. So, don’t make a mistake of withdrawing it, rather just continue the EPF until you reach your retirement.
Underestimating the retirement period
Many a times we have seen that people underestimate the retirement period. Some just consider a flat number such as 20 or 30 years and some consider nothing at all. However, it is very important to calculate the retirement period properly. Considering the advancement in healthcare, there are strong chances of people living more than their expected age. So, never make a mistake of underestimating your life expectancy. It is prudent to estimate the life expectancy ahead of what you may be actually expecting.
Able to work even after retirement
Although, no one wishes to work post retirement, rather wish to spend more time in leisure; but there are some people who assume that they would be working for almost 5 to 10 years post retirement. This is the mistake one should avoid while planning for retirement. Here it would be prudent to assume that you would stop working post retirement and based on these assumptions plan your retirement. This will help you to be conservative as well as it would give you flexibility, even if you desire not to work post retirement.