The burden of having to save for retirement has now been broken and it has reached a point where the amount of fund you save up for retirement is not as important as how you manage retirement funds.
It is very relevant for people to acquire their retirement funds at an early stage before retiring. The rate at which retired people spend can be determined by the amount of money they were able to save during their working days. But this is not as easy as it seems because there are many challenges that affect saving up for retirement.
It is also important to have an adviser to help with saving up for retirement. Those that are unfortunate to not have someone advising them about saving for retirement tend to face a lot of difficulties because they do not know when and how to get things done.
Nigel Orange, the technical manager of Canada Life stated that “There are so many factors that come to play when it comes to retirement funds. It all depends on the fund, investment timing, how much earnings people have, they type of investments they have made, the current economic status and the age of the client.”
With all these things to have in mind, its does not come as a surprise when people make mistakes along the way. Intelligent Pensions marketing director and head of Pathways, Andrew Pennie says “People speak of life expectancy but if you are working to an average, there is a one in two chance of failing at some point in time.”
“People often overestimate how much they can take from their plan and underestimate their life expectancy and also long time expenses.”
This has become a major concern for the government as more people continue making these mistakes and in the end, they run out of their retirement funds.
Orange went on to explain that “If the average life expectancy is 85 and you are retiring at 65, you are probably going to live for another 20 years which is effectively 240 pay days.”
People should be able to understand every aspect of retirement and how to manage their funds.