9 Retirement Planning Mistakes to Avoid

27 November 2022
9 Retirement Planning Mistakes to Avoid

One of the most crucial long-term objectives in terms of wealth should be saving for retirement. If you plan ahead properly, you may secure your independence and financial stability into old age and even get the most in-demand house and lot in the Philippines for your retirement home, like Lumina Homes.


It's no easy achievement to save enough money and get to retirement age without scrambling. Most individuals need a lot of time and work to save up enough money to do this. Planning for retirement is a marathon, and even if you run it precisely, it might be difficult to save enough to retire comfortably. And when things don't go as planned, which let's hope won't happen, the future might become fraught with anxiety.


That's why if you want to stop this from occurring, you need to think about the investment advice as well as the biggest mistakes people make while preparing for retirement and take steps to correct them right now.



1. Failing to make a choice

In order to have a secure retirement in the future, you must make some tough decisions now. Disruptions to your short-term objectives might occur when you have to consider the long-term implications of questions like how much you should save as well as where and when to retire. However, if you don't take action immediately, you'll greatly enhance your chances of retiring with very little money and not reaping your tax-advantaged retirement accounts.


Avoid being overwhelmed by doing things slowly and methodically by consulting a financial advisor. Get a better job and cut your expenses or if you want to save enough money for retirement, you should invest it in something that will provide you a steady stream of income, like buying an affordable house and lot for sale as an investment.


If you have a clear goal in mind, saving for retirement will be much less of a hassle. Starting right now, plan for your future living arrangements. Keep in mind that what you choose to accomplish today may help you formulate a strategy that is both realistic and effective.



2. Inattention to taxes and other fees

When you finally reach retirement age, you don't have to deal with the hassle of completing your taxable income with the internal revenue service. However, it doesn't imply you have zero responsibility. You still have to pay taxes on your real estate, your business's profits, your foreign travel, and your estate if you plan to leave any assets to heirs after your death.


So make sure that you don't overlook them to calculate how much cash you'll need in your retirement accounts, since doing so will harm your savings. You can also consult a tax advisor for more comprehensive advice about this.



3. Being in too much debt

If you keep piling on debt for your day-to-day expenses, you may be making payments far into your golden years, cutting into the savings you had planned to use for retirement.


When you buy purchases you don't need, or spend money in ways you don't intend to, and then fail to repay the obligation, you are in bad debt. When you rack up debt, it may be difficult to meet other financial obligations and save for the future, such as retirement. This is the reason why you should ideally clear all of your debts before you retire.



4. Failing to invest your money

When you finally retire, you can finally enjoy the vacation you've always dreamed of or spend more time on that hobby you've been meaning to start. If you've been counting on your savings alone to pay for your retirement, you should look elsewhere, especially if unexpected expenses occur.


It's possible that you're counting on your retirement funds and government pension to see you through the golden years. The difficulty is that there is a certain amount of time that savings can be used before you need to start withdrawing money for other purposes. If you're saving for retirement, it's a good idea to read up on long-term stock investing such as UITFs and mutual funds.



5. Only counting on your government or company retirement package

You may be able to get by on your pension from the social security benefits, your company 401 k plans, or even the simplified employee pension after you retire, especially if you reduce your living costs. It won't be enough to retire comfortably, however, particularly if you end up living longer in retirement than you expected.


The key to a good retirement is saving and investing early on and keeping your gains safe for when you finally retire. Check out the many entry-level investing choices out there. Put money down in a personal retirement account, buy an affordable house and lot to start your real estate investment in addition to your government pension and your company's retirement package.



6. Not considering inflation

The truth is that inflation exists. You should not base your retirement savings on what would be sufficient based on today's costs of living. So, keep this in mind as you prepare for your retirement goals by planning with the average of the three-year rate of inflation in mind.


Keep up with inflation by finding other ways to enhance your retirement money. When you reach retirement age, you'll be glad you put money into real estate, equities, or bonds. Don't lose out on the possibility to give yourself a financial boost in retirement if you don't start investing early.



7. Large expenditures

Filipinos are known for their lavish celebrations of major occasions like birthdays, anniversaries, and other life-markers. To pay for them, you may even consider getting a loan or using credit.


It's worth keeping in mind that cutting expenses and putting away more money each month will help you prepare for retirement in style.



8. Excessive reliance on adult children

There is a widespread notion in the Philippines that if you raise your children, they owe you something. However, it is your duty as parents to provide a comfortable existence for your children. So, kids aren't a retirement fund.


It's a major faux pas in the realm of saving for retirement. Plan ahead for your retirement so that you may live comfortably and independently without depending on your children for financial support.



9. Overlooking medical expenses

Unfortunately, Filipinos don't plan ahead enough to save for their health care expenses, thus this aspect of retirement planning is often neglected.


Getting a health or medical insurance policy may assist cover some of these health care costs. Other medical and health insurance plans and health savings account, in addition to PhilHealth, are available from insurance firms in the Philippines.



Get a Sure-Fire Retirement Plan With Lumina Homes

You can now set good retirement planning by avoiding these common retirement savings mistakes and knowing how to grow your money properly.


If you're looking for a lesser-risk investment for your retirement, the affordable house and lot that is being offered by Lumina Homes are one of the best retirement plans you can have for your future.


These best home package deals are built in strategic locations, giving them a high potential for return on investments. We have over 50 communities available nationwide and all of them have proximity to almost everything, including major thoroughfares and highways, medical facilities, educational institutions, famous landmarks, as well as groceries and shopping malls.


This makes our home units an ideal place for rental apartments or even AirBnB listing. Enjoy the brilliance of getting a cushy passive retirement income every month and witness how your property value appreciates in two-years time!


Start building a good foundation for your retirement planning and start your Lumina Homes investment now!

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