Key mistakes to make when saving for retirement

ended 29. November 2021

A journalist at the Daily Express is looking for comments from IFAs and money experts on key mistakes to avoid when saving for retirement. No need for a dozen, just a few will do, written in easy-to-understand language!
 



 

6 responses from the Newspage community

As Warren Buffet said "don't save after spending, instead spend after saving"
1. Not having an understanding of what they are currently spending and where the money goes (and where some could be saved). 2. Not starting saving soon enough. 3. Not saving enough per month 4. Not knowing how much of a retirement pot is required to deliver the retirement lifestyle they want without running out of money. 5. Not taking advantage of various tax wrappers 6. Not understanding risk and return are linked, and markets don't always go up.
"Some people wait too long before planning. It is better to start when you are younger, even if you only put aside £10 per month. It will get you into good habits. Some people are too cautious with their retirement planning. If you have 20 plus years until you are going to access your money, you can afford to be a bit more adventurous."
Key mistakes to avoid when saving for retirement - Not joining your employers pension scheme or opting out of their scheme - by doing so you are forgoing free money/pension contributions. Delaying doing anything - the earlier you start saving the more you gain from the tax benefits associated with pensions. Inertia will cost you! Not considering the impact of inflation - if inflation is on the increase so should your pension contributions. Not considering how your pension is invested - there is a huge difference between the top performing pension investments and the worst performing.
Our top 4 tips Key mistakes to make when saving for retirement are: 1. Saving too little – you should be maximising the tax reliefs and allowances available to you (and your employers!). 2. Saving too much – pensions are a taxable investment; they have strict rules and allowances and exceeding these can have significant consequences so make sure you also utilise other tax reliefs and allowances available to you. 3. Underlying investments – invest in funds in line with your attitude to risk and be sure to include diversification to minimise volatility and risks. 4. Failing to plan – speak with an independent financial adviser to help you get a suitable retirement and tax planning strategy in place and to help target long term growth. Make your money work for you!
The biggest mistake to avoid is handing your finances over to someone else. You don't have to know everything but knowing where and how your money is will help you feel in the loop. This will also teach you about money and investing which is always a good thing. Feeling financially empowered is key to growing your wealth and your self!