For most people, retirement means more expenses and less income. Everyone is, therefore, advised to plan well for their retirement life. What this means is ensuring that you make the right financial decisions that will cushion you in retirement when your income sources run down.
There are some financial decisions that might appear good at the moment, but may end up putting your retirement life in a total mess.
One of the most important things to do during your prime is to resist the strong urge to pump all or a substantial portion of your resources in providing for your children. One of the mistakes people make is spending so much money in private schools for their kids without sparing some for IRAs and 401(k)s. While giving the best for your children is always a good thing to do, it shouldn’t be at the expense of everything else, more so your retirement life. There are parents who give their all to their children, hoping that their children will support them in old age. Although it happens in some cases, it’s never sure since your children also have their responsibilities. Being mortals, we can also never be sure that our children will live to support us in retirement and that’s why it’s advisable to personally take charge of our retirement lives.
Another thing to do is to invest some money in the stock market, in spite of the fluctuations experienced in stock prices. There are people who make stock market investment decisions based on a single event, something that might not be true in long term. It’s good to point out that stocks have performed pretty well over close to a century. Since 1926, stocks have risen in value by an average of 10% a year, beating both bonds and CDs by a notable margin. However, it’s important to start reducing your stock holdings as you go deeper into retirement.
Third, never spend your money with the conviction that you’ll work forever however simple your job is. As human beings we fall sick, and during such times, stressing self with work might have a deteriorating effect on our health. There is also the possibility of being downsized. If, for example, you’re putting your hopes on a stable paycheck when you’re already in your mid 60s or 70s, you may end up having your retirement life in shambles.