Managing Retirement Savings at 50: 5 Mistakes to Avoid

You’ve prepared for years, and now, you’re ready to retire early. Here are a few mistakes to avoid so you can live your life to the fullest without stressing about your savings running out.

by Sam Bautista, 12 December 2017

Avoid these mistakes and enjoy your retirement savings!

You made it. You’ve reached your goal of retiring early at 50 and are now looking forward to blissful days of sleeping in and indulging in all your hobbies full-time. Before you ride off into the sunset, make sure you avoid the following mistakes that’ll potentially hurt all the planning you put into your retirement and jeopardize your long-term goals.

Mistake # 1: Miscalculating Your Monthly Expenses

Do you have health payments that you overlooked? Are there non-monthly expenses that you’ve forgotten to take into consideration? These costs add up over time and will affect your savings long term. Make sure that you’ve accounted for all your regular expenses.

Mistake # 2: Spending More than You Should

Let’s be real, do you really need that second vacation home you’re currently eyeing? Can you reign in some of those Hong Kong shopping sprees? There’s no need to compromise on the lifestyle you are used to, but keep in mind that eventually, you will no longer get a steady paycheck. It would be wise to stay on the conservative side of spending while you identify all your alternate sources of income and account for all your regular expenses.

Mistake # 3: Not Recognizing the Need for Long-Term Care

It is a difficult conversation to have with your spouse or other members of the family, but it is important to plan for the long haul and consider your needs in 10 or 20 years. Have you accounted for health expenses that may crop up then? 

Mistake # 4: Investing without Planning

It was much easier to throw caution to the wind when you were younger and could easily recoup your losses, but now is probably not the time to gamble your savings on anything that is too high risk. Sit down with your wealth or financial advisor and go over your options. You might be surprised to find what options are available in terms of conservative investment plans.

Mistake # 5: Only Vaguely Knowing Where Your Money Goes

This should be a no-brainer. It is crucial to be on top of your income but it is just as important to know exactly where all your money is going. Don’t write off unexpected expenses as one-time occurrences. A couple of thousand pesos here on a house repair project, another couple on a sudden car expense can quickly add up, and totally upend your budget. Factor all these unexpected costs in and breathe a little easier knowing that there is some wiggle room in your monthly or yearly budget plan.

Early retirement is an achievement in itself. Give yourself that pat on the back but keep in mind how all your savings can easily go down the drain if not managed properly. Remember, wealth planning doesn’t stop on the day you retire. Work the plan and keep yourself financially secure through the next chapter of your life.