7 Retirement Investment Misconceptions

Happy Retirement

Going into retirement without proper planning is a culture that is affecting most aged South Africans. This normally caused by certain misconceptions that people take into perspective before they retire. Here are some of the retirement investment misconceptions:

Not saving

Saving money helps you to secure your retirement package when there is still time. By not saving, you are simply putting your retirement into jeopardy as you would end up considering having so much debts that are not affordable to pay.

Understand true cost of living

Not spending much on your living can help you to save towards your retirement. Subscribing to a number of credit facilities that debit your account at the end of the month can heighten your cost of living.

Reducing your social security benefits

By cutting your social security benefits, you are simply reducing some of the benefits that you are designed to benefit when your reach your retirement age. It is very important to divert part of your money towards your social security benefits that you will enjoy afterwards.

Starting to save later

Many people make the mistake of saving late when they have so much to take care of. Making early savings when your family is small or before you get married is of paramount importance. It helps you to save more before your monies have so much to take care of.

Ignoring inflation

Inflation is an important factor in our lives. It gives us an idea or direction at which any country’s economy is taking. If the economy of a country is bad, inflation rise and so does the cost of living. By ignoring the rise in inflation, your cost of living gets affected and your savings get reduced. Such can me that your retirement package gets affected as well.

Focusing on a single risk

It’s very important for every investor to diversify his substantial returns to arrive at retirement with a decent-sized pot of money. Avoiding stock market risk increases other types of risk, like the possibility of outliving your money.

Retiring with no plan for income

When one retires, they have to make sure that there have a source of income that will help them make an honest living. As retirement nears, lots of investments need to change, moving away from growth in accumulation toward a distribution and preservation stage.


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