3 Common Pitfalls to Watch Out for in Retirement Planning

Planning ahead for your retirement is key to enjoying your golden years in peace and comfort. The sooner you start, the better prepared you’ll be – but with so many factors to juggle, it’s easy to make mistakes that could end up costing you down the line.

The Lester Brunt team have helped countless people across Dorset, Wiltshire, Hampshire and beyond plan for their retirement, so we’ve seen the most common missteps firsthand. Below, we explore the top three pitfalls people fall into and the best ways to avoid them.

1. Underestimating Expenses

Many people have the idea that their bills will shrink once they retire. While it’s true you won’t need to pay for work-related costs anymore, you’ll still have other expenses to cover, and some might even grow – for example, long-term care, travel, and hobby costs.

That’s why it’s so important to plan ahead and create a budget that covers everything you might spend, both big and small. Here are the main costs you should account for:

• Mortgage payments, rent, property taxes, homeowners insurance, maintenance, utilities
• Car payments, insurance, petrol, and vehicle maintenance
• Groceries and personal care items
• Long-term care
• Electricity, water, gas, internet, phone
• Holidays, flights, accommodations, transportation, activities
• Hobbies, dining out, movies, concerts, subscriptions
• Birthdays, holidays, special occasions
• Charitable donations
• Home renovations
• Major purchases like cars and furniture
• Estate planning
• Funeral costs
• Emergency fund

Planning your budget around these factors will help you lower your risk of financial struggles in retirement, avoiding the stress of money worries or the need to return to work.