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Top 10 Mistakes of Retirees

By Randell Tiongson, Brighterlife.com.ph

Comments (8)

retirement-iconWhen you’re young, you have a lot of time but little money. In your working years, you have money but little time. Such conundrum is the reason why retirement is something that a lot of people are really looking forward to because it enables us to finally enjoy both our time and our money all at the same time.

But it’s not all rainbows and butterflies upon retirement – there are still many things that can go wrong financially. It’s best to be informed so that you’ll know what to anticipate when you retire.

Here are the Top 10 mistakes of retirees:

1)    SHORT TERM ORIENTATION. The fact is, you will probably live about 15 to 20 years more upon retirement (even longer hopefully). As such, you will still need to grow some of your money and invest a portion on some growth-oriented investments like equity funds. While it is advisable to reduce the percentage of your portfolio in more risk-oriented investments, don’t totally remove them.

2)    FORGETTING ABOUT INFLATION. Inflation will not retire just because you did. Your retirement funds will still need to grow to catch up with inflation; which is why I recommended investing in some equity funds during retirement.

3)    PUTTING ALL YOUR EGGS IN ONE BASKET. The rule on investing still applies during retirement: diversify. Maintain a healthy portfolio of cash, money market investments, bonds or bond funds, and a small portion on equity or equity funds.

4)    SPENDING TOO MUCH, TOO SOON. A common behavior among retirees is they rush into a spending spree. Retirement to others is liberating and the urge to live beyond your means is a very strong temptation. Don’t rush. You still have a lot of time, so take it slow.

5)    SIMPLIFYING ESTATE PLANNING. You probably will need more than just a will. Retirement is a good time to consider some serious estate planning. Learn about the many ways you can plan for your estate.

6)    NOT PREPARING FOR MEDICAL EMERGENCIES. 60 or 65 is still a relatively young age, so the need for medical concerns is not yet taken seriously. However, while the spirit is still willing, the body is not and it will be good to provide for a time when we will experience physical ailments.

7)    NOT REVIEWING FINANCES AND INVESTMENTS. The need to do a periodic review on finances and investments should be a primary concern of any retiree. While it is not a good idea to worry too much, being too carefree is not a prudent thing to do. As I said earlier, you still have a long time to go.

8)    RELYING ON SOCIAL SECURITY ALONE. Seriously? SSS is meant for a retiree to survive, not for a retiree to enjoy his retirement. Do the math – no one can live a decent life with just SSS benefits.

9)    MAKING RISKY MOVES WITH MONEY. While I recommend that a retiree should still be investing, going into high risk or speculative endeavors might not be a really good idea.

10) WORRYING TOO MUCH. Alas, while prudence is key during retirement, fear is a very crippling mindset. So long as you follow common sense and have done your best in preparing for retirement, try to relax as this is what retirement is all about. If you are always fearful that your wealth will not be sufficient during your retirement, you may not live long enough to actually enjoy that wealth.

Like in anything in life, balance is key. Prepare properly for retirement but enjoy it as well.

Randell Tiongson is a registered financial planner. With more than two decades of professional experience in financial service industry, he has been one of the most respected personal finance coaches in the country. Randell is a firm advocate of financial freedom and education especially to OFWs.

 

Need more professional advice for a brighter retirement? Contact a financial advisor here.

Nessel Jane M. Paladin on

Greetings of peace!

My concern is, i want to have a savings or invest some money or have bonds/mutual funds. Money that will grow, but the problem is i dont know whete to start and what to do. Although i know some terms of business, i graduated financial management and i had a little idea of it. I just want you help to me of my needs.

Another concern is, i just have 5,000 money to begin of investing. I read it some part of your site that a minimum of 5,000 can have a mutual funds. Can you elaborate me with this?

Last concern, i try to register in sunlife, but cannot because i dont have a premium or a plan number. I try to reguster because i want to know more and adk from your good company abour my concern.

Hoping for your response on my queries.

God bless you and your good company!

    Mika Amador on

    Hi Nessel! Yes, that’s correct, minimum initial investment for mutual funds is P5,000. To give you a background, mutual fund pools together money from different investors and invests them in various securities depending on the investment objective of the fund. Get to know more about our products and services by talking to one of our financial advisors. You can send us an email via editor@brighterlife.com.ph with your contact details so we can refer you for free consultation. Thank you. 🙂

Cody Deegan on

Thanks for sharing this tips. Will surely tell this with my parents. Great post by the way.

AAFS Insurance on

Many of these points also apply to people who haven’t retired yet. Generally, if you weren’t comfortable with something financially during your working years, you wouldn’t be comfortable with them after retirement.

iceberg on

I made all the mistakes stated above. Good news, I joined the insurance industry to try to teach young ones not to make the same mistakes.

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