You are probably getting ready for retirement. Then it is too bad if you never planned for it, taking pre-retirement training, saving and investing for the inevitable, honing a skill or trade to fall back on, and all that is required for a happy post retirement life.
Whether you have done these or not, there are risky retirement moves to avoid and those likely to pay off. The following may serve as worthwhile guide when planning for retirement.
Resist temptation to invest in ponzi scheme
Depending on what contributory pension scheme you subscribe to, you may be awash with money at retirement. When you hear about a hot company or see an article on how much someone made by investing in a company it can be tempting to invest heavily in that one company.
But you have to exercise caution.
One ponzi scheme can drain up all your savings and commit you to some unexpected debts or even mortgage your retirement home.
A ponzi scheme is one of the many unregistered and illegal investment fund managers that promise to give high and attractive returns as bait. Because it is illegal, the managers can disappear with investors’ pool of funds.
When it comes to investing retirement savings, it is a good idea to diversify your investment. This can help you weather a problem in one sector or company as you move towards retirement. No matter the attractiveness, never put all your savings in one investment basket.
When you have lots of time before retirement, you can take more risks with your money. As you get closer to retirement, it is a good idea to become more conservative. You have less time to make up any losses.
Failure to invest in self
When it comes to preparing for the kind of retirement you want, your career can impact whether you can get there. If more education or training will expand your career and earnings opportunities, the investment can be worth it.
You may be spending money upfront, but an increased salary can ultimately allow you to put more money aside for retirement.
Don’t draw early from retirement savings
Drawing early from retirement savings before or shortly after retirement can drain the funds needed for start up capital for a post retirement business.
Even as you set and reach other financial goals, such as buying a house or paying your children’s school fees, it remains a good idea for retirement savings to be kept intact.
Get started with realistic business
Few investments are a guarantee, but your retirement finances are not something you want to gamble away. The biggest gamble is not planning for retirement at all.
The first step in planning is determining a realistic idea of how much money you will need in your post-work life and then getting started at saving as much as possible.
Shun credit facilities
One of the most grievous mistakes you may regret is obtaining credit facility to finance business start up which lacks realistic evidence of viability and returns.
Lenders care less about the outlook of your business when you fail the repayment plan.
In that case, winding down the business to recover the loan or disposing of the credit collateral might become an attractive option. This may result to liquidation of the business venture.
