(2) Overspending In Initial Retirement Stage
It is one of the most important retirement investment mistakes to avoid. Retirement is often accompanied with receiving of lump sum amount of retirement funds. New retirees often utilize those funds to celebrate their new work-free & stress-free life.
They often take on more debts to purchase a bigger home or apartment, new luxurious cars, extravagant vacations at unexplored tourist destinations.
These overspending habits of a new retiree will often results in a situation in which money is depleted at a much faster rate than their sources of income during old age. One should spend money cautiously during old age to safeguard his/her future needs.
(3) Paying Excessive Investment Expenses
It is one of the popular retirement planning mistakes to avoid. Investment is always accompanied with cost of investment. This cost may even exceed your initial expectations. When looking for best retirement investment options such as mutual funds, people often see management fees as the major fees but they usually ignore associated hidden cost.
Some of the hidden cost associated with investment include portfolio turnover costs, hidden sales charges, & other hidden charges due to under-invested portfolio, etc. These hidden costs can significantly increase the cost of investment in mutual funds.
Similarly, when buying or selling stocks, you observe only the commission or brokerage fees paid to equity broker. However, you often ignore other hidden charges such as bid/ask spread & dealer markup.
Thus, you should focus on the return & only pay for value added services that put more money in your pocket than they take out.
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