- Retiring too soon.
- Spending too much.
- Spending too much on housing.
- Worrying too much.
- Not learning enough about investment before retirement.
- Helping children too much and leaving themselves short.
- Not getting on going financial & planning advice leading up to retirement.
- Failing to understand what diversification really means .
- Moving house too often while looking for utopia.
- Not living / spending too little.
- Not realising how much you can do in NZ on less then you might think.
- Not taking sabbaticals while still working.
- Believing that you can (or the “experts” can) pick the right shares.
Common problem, too many people think they have to stop at age 65, before finding out just what cash flow they will have/need in retirement.
If it is just too little, they would be better working a little longer. Just by working say 2 years longer means you can save for 2 more years, probably enough for an extra 2 years in retirement.
By working that 2 years longer, your retirement funds only have to last only say 22 years instead of 24.
Two more years work can put you up to 5 years ahead !
Spending too much
Pretty obvious, do your homework and budgeting. However you may plan to gradually spend your money and “die broke” (easier said than done).
Be smart and find independent advice to help you monitor how fast you are spending your money. Then if you ”live too long” hopefully you won’t have to live out your golden years in poverty.
Note my father lived to be 100, so you never know ! (he was prudent and found a good balance between living and spending).
Spending too much on housing
Not much good owning a $500,000 house and having only $50,000 in the bank to supplement your (rather lean) govt super of $26,000 pa. (current rate for a couple over 65)
Don’t get to retirement living in a castle with too little cash to supplement your super.
Worrying too much
The news media will drag you into the mire. Turn the news off and get out and about.
Not learning enough about investment before retirement
Knowledge is power. Learn about investments as you save for retirement, and probably avoid the disaster some people incurred when they put all their money into one or two finance companies.
Helping children too much and leaving themselves short
Love them or not, they have may 25 to 40 years of working life in front of them, you don’t. Be careful, keep most of your money back for yourself.
Not getting on-going financial & planning advice leading up to retirement
If you fail to plan, you plan to fail. Get advice – if it costs say $150 to $200 pa that is peanuts compared to what it might do for you.
It might get you organised.
It might save you thousands.
It might even save you tens of thousands.
An independent adviser might help you “see the wood from the trees”.
Failing to understand what diversification really means
Dozens of bonds and thousands of shares, both on and offshore.
You can’t pick the hot investments, no one can. Rather diversify properly, and you will make good money in good times, and survive the bad times pretty well too.
Moving house too often while looking for utopia
Utopia does not exist yet I have seen people move up to 7 times in 5 years looking for it. Imagine the moving costs, real estate agents fees, cost of new carpet, or curtains or kitchen, or a new fence.
Money down the drain – if somewhere else appeals, camp / house sit / rent there for a while and try it out, cheaper in the long run in case you are wrong.
Not living / spending too little
You can’t take it with you. Get advice and and out how much you can safely spend if you are worried.
Not realising how much you can do in NZ on less than you might think
There are dozens and dozens of free things you can do in NZ with an ordinary car and an inexpensive caravan.
Be adventurous, go on the road and enjoy it all, we have a beautiful country.
Not taking sabbaticals while still working
Getting burn out, then quitting work (retiring too soon) because you are exhausted, is not smart.
It will be cheaper in the long run to take breaks as you go along, so that you can have more quality of life and if necessary extend your working life.
A lot of people like working, but don’t get burned out and then quit for the wrong reasons.
Believing that you can (or the “experts” can) pick the “hot” investments
N one can, rather buy quality and diversify widely. Beware of some apparently wonderful companies; the costs can be too high. After all someone has to pay for their big buildings and glossy brochures - and it will be you.
Also beware of commission salesman (and big organisations) and others who make brokerage for telling you to buy this, sell that, buy this, sell that.
They are looking to generate income for themselves, and their “advice” may be good for their pocket/profits, but it may not be good for you.