At the point when the retirement dates move toward the greater part of the individuals start to pose inquiries to abstain from committing Retirement mistakes.
It can influence your life as a retiree and the financial planning of this phase of your life. These questions generally show up in the earth of 55-60 years, and in spite of the fact that there are as yet a couple of years left for retirement, it is helpful to have clear questions about retirement. Retirement is one of the problems that most concern many. The uncertainty about how pensions will be in the future is leading to more and more people starting to plan their retirement.
It is so important is to think at this moment as important as doing it correctly without making a series of mistakes that are still very common:
The importance of financial planning for retirement
Planning for retirement is important for several reasons, after all, many people want peace after retiring. The point is that this is only possible if the amount of the benefit covers all the retiree’s demands and needs.
Therefore, it is necessary to know what the income will be according to the contributions made so far and adjust the monthly installments if necessary.
Another point to be considered is the period in which retirement will take place. As there are several types of benefits and each has its own specific criteria, it is necessary to fulfill the requirements at different times.
In this sense, if good planning is not done, the person is at risk of retiring later than he would be entitled, paying more contributions.
It is also often the case that some policyholders choose to retire very early and receive a much lower income, that is, if they wait a few more years to fulfill the criteria, they would have a higher payment.
In addition, it happens to be worth stating that the pensions provided by social security are uncertain and do not guarantee financial gains capable of providing a peaceful standard of living in the future, as the laws change constantly. Therefore, it is crucial that you think of new alternatives.
Do not think that the public pension is enough to cover all your expenses
Although the current reality is leading to many who complement their pension with products such as a retirement plan, most still do not. The public pension may not be enough not only because it can be reduced, but mainly because you will enjoy a higher quality of life for longer.
Thanks to the capital or income that you can get with a forecast product you can get that complement that will be increasingly important and valued.
Leave the amounts that you will need and receive at random
There may be many years left to retire, that you are going to change jobs, that the price varies but still it is important that you know, in the current circumstances, what your public pension will be. Achieving it is simple thanks to the Self- Calculation program of the retirement pension that you can access from the Social Security website.
This is the starting point so that compared to what you believe your future needs or projects will be, your present income will be allocated to complement your retirement pension.
Think about your retirement when you have a few years left
Although people say goes that it is never too late if the bliss is good, the truth is that acting in this way in retirement savings has important disadvantages.
The first is that the contributions that you must dedicate to obtaining that income or complementary capital will be greater.
The second point in the case of products such as a retirement plan is if you exceed 8,000 euros per year (or 30% of your income from work or professional activities), you can lose the tax benefits of contributions.
And the third, even more important, is in the benefits you get from these contributions. These accumulate and in turn generate other additional interests, so saving in the long term not only allows to do it more comfortably, contributing less and benefiting from its taxation, it also allows to earn more.
Think of your retirement savings as something alive
Many of the changes in your life, especially the economic ones, influence when planning retirement. Therefore, adapt the investment to your personal circumstances and the time left for your retirement.
So you can, for example, modify contributions when economic circumstances force you to reduce this saving and otherwise accelerate them if you need a higher capital or income.
Consequently, it is advisable to reduce the exposure to assets with greater risk, such as equity, and transfer (transfers between plans have no costs for the client) part or all of the accumulated assets to pension plans with a more conservative profile, and thus avoid shocks in the last years prior to retirement.