ommon Mistakes to be avoided in 50’s
Hello Avid readers, in continuation of the series of common mistakes to be avoided in specific age, we are here with Money mistakes to be avoided in 50’s.
50’s is an important decade in one’s life as he/she is not only at the peak of their earning years but also 10 – 15 years away from their retirement. Making money mistakes at 50’s will have bigger consequences like delaying in retirement or huge impact on quality of life. So here are few common money mistakes that one should avoid in their 50’s are :
1. Failed to consolidate assets & scattered investments : By this age, mostly investments were done on the basis of knowledge shared by others like friends & family and for taxation purpose. So one had only a random idea of their networth. Failing to consolidate assets & scattered investments lead to not realizing the actual networth of the person. Having clarity of networth help individual to get clear picture of the requirement after retirement.
2. Withdrawing money from retirement kitty : One of the biggest mistake is withdrawing money from retirement kitty for emotional reasons may be it is for kids education in abroad, their destination weddings, buying a holiday home. Many of us choose to fund kids education at the expense of their retirement, but it will be difficult to make up the difference. One should remember it is easier to borrow money for child higher education than it is for retirement.
3. Not realigning one’s portfolio : From the time one start investing, they always want to invest in those avenues which can provide best returns. But one should understand High returns comes with High risk. People tend to forget to align their equity oriented investment to the balanced one as they are moving towards their retirement. So One should avoid this mistake & need to balance risk/ reward of their portfolio through proper asset allocation.
4. Not able to estimate income replacement corpus after retirement: When one is in their 50’ they are so close to their retirement & they start visualizing that after retirement they will not be having much responsibilities & have so much time to fulfill all their wishes like travel or pursuing any hobbies. But one thing to remember to do things you will need money. So if one think they are going to spend less after they retire ,that’s not true. So one should have fair idea of the corpus required after retirement.
5. Delay in succession planning : Many of us think that will or estate planning is a practice for only rich people, but that’s not true. Drafting an estate plan will make your family members aware about your assets & investments. If not done then it may create dispute among family members or in case of any uncertain events may be the assets accumulated by you will not received by your loved ones.
How to secure your financial freedom in 50’s ?
- One should consolidate their assets and scattered investments with those financial institutions who had strong Digital presence.
- As well as one should try to build a well balanced portfolio with the help of trusted Financial Planner, who can explain how different scenerios can impact short & long term objectives.
- One should be very discrete towards their emotional / lifestyle expenses . Make sure that one should intact to their retirement corpus.
- Making a will is must and one should ensure about Nominee registration in all their assets and investments.
Conclusion :
At 50’s one is on the horizon of their career enjoying best earning years but one should prepare for an alternate reality ie Retirement. Being in control of your money allows you to spend on the things when you want to. So try to learn from these above mentioned mistakes & lead a fulfilled Life. We at Nivesh Ki Paathshala, would be happy to help you out with your queries & doubt.