4 Mistakes to Avoid When Planning Your Retirement

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Have you started planning for your golden years? 

It can be challenging to predict how many years you will spend in retirement and how much money you need to be able to secure a comfortable retirement. When it comes to retirement planning it doesn’t matter when you start nor matter where you start, all that really matters is that you make a start. 

As life expectancy continues to increase in Australia, it’s important to ensure you save enough in your retirement nest egg. 

No one wants to outlive their savings, and for this reason, it’s crucial to plan ahead as early as possible. You may think that planning for your life post-employment is an easy task, but a lot of things can go wrong if you don’t know what to look out for and if you don’t have expert guidance.

In this article, we will run you through some common retirement planning mistakes and how you can avoid them so you can look forward to your retirement years.


4 Biggest Retirement Planning Mistakes:

Mistake #1: Not Planning Early Enough

Whatever your retirement goals may be, it’s never too early to start planning for your future. 

If you start planning earlier, you can make organised financial decisions to help grow your retirement savings, such as which investments to make and the amount of money you need to save.

One common mistake people make when planning their retirement is they wait too long.

Even if you plan to prolong your retirement, it’s important to start looking at what your options are.

As early as possible, you may want to think about the following questions:

  • What are your retirement goals?
  • What does your ideal retirement look like?
  • Do you want to travel overseas or take up a new hobby?
  • Do you have income streams to help fund your retirement lifestyle?


You can then have an idea of how much savings you’ll need and how you can manage your cash flow now to meet your future expectations.

For example, if you’re going to spend your time travelling, taking up new hobbies such as playing golf, etc., you may have to save more money to achieve these goals.


Mistake #2: Not Focusing on Growth with Your Retirement Savings

You may want to check how much you currently have saved and how those savings are currently being invested on your behalf. 

By checking your super amount through either myGov.au or directly through your superannuation fund, you can see how your money is being invested and if it aligns with your risk tolerance and growth objectives.

It can be a common mistake for your investment portfolio to misalign with the timeframe of your goals and when you expect to retire. You may be investing your money in a portfolio that is too conservative for your needs, meaning you may not reach your retirement savings goals. 

This is especially important to consider if you are a while off retirement. 

If you have more than 10 years until you retire, you might like to consider higher growth investment opportunities that allow your money to work as hard as you do!

Before you consider any investment opportunity it’s crucial to do your research beforehand and ask yourself these two questions:

  • What is your risk tolerance?
  • What is your risk capacity?


Determining your risk tolerance and risk capacity could provide you with the right guidance on what investment mix would be most beneficial to you and support your wealth creation.


Defining Risk Tolerance and Risk Capacity: 

  • Risk Tolerance: is the amount of risk you are willing to take or comfortable handling from the variability in investment returns. Your age, income and financial goals can also help you determine your risk tolerance. 
  • Risk Capacity: is determining the amount of risk an investor ‘must’ take in order to reach their financial goals. 


Your time horizon is also an important aspect of investing and if you wish to utilise capital, markets will move in all directions and understanding your strategy chosen will hold you in a good position to achieve your long term focus. 

Determining your investment time horizon will also reassure you on your investment strategy when market volatility increases or gets the jitters. When you stick to your well-planned, long-term investment strategy, rather than changing strategies within a short time frame, you can reap the benefits of:

  • Gain better long-term returns 
  • You can ride out the highs of the market and the lows of the market
  • Can be cost-effective compared to regular buying and selling, due to the longer you hold your investments, the fewer fees you have to pay.


Talk to a financial adviser about your investment growth options and how you can match your investment strategy with your risk tolerance for success.


Mistake #3: Not Spending Enough Money Early in Retirement

When you retire, you don’t have to quit spending money entirely. Just be smart when you spend, and you will lay a good foundation for your retirement.

It is a common mistake to underspend early in retirement as an attempt to make your retirement money last longer. However, this comes from a place of feeling worried that you will run out of money. 

But with the right retirement plan in place, you can feel confident that you have the savings you need to live your dream retirement lifestyle. 

Finding the right balance is key to enjoying your wealth and staying comfortable throughout your retirement.


Mistake #4: Not Saving Enough Retirement Income

It’s easy to get distracted from your retirement savings if you are not careful. You may think you are saving enough, but you put your financial future at risk if you don’t plan your spending. 

You don’t want to be struggling in your retirement and not have enough money to enjoy it.

If you don’t have a current plan for building your retirement savings and an idea of what savings you need long term, you could possibly leave yourself short of retirement assets to continue supporting your existing lifestyle or living the lifestyle you wish to live during your post-employment.

If you are worried you may not be on track to reaching your savings target, you may want to consider seeking a retirement planner who can provide you with tailored financial strategies and a plan to help you reach your goal.

With the cost of living rising in Australia, it’s important to consider the amount you will need in retirement and if you need to take action now to ensure you meet that savings goal. 

At Poole Advisory, we believe the best way to save for retirement is the smartest way! We can guide you through time-efficient and cost-effective strategies that help you grow your retirement savings without having to sacrifice your lifestyle today. 


Want to get started on your retirement plan today?

Retirement planning can be complex, but if you start early and learn from the retirement planning advice of experienced professionals, you can start on the right track. It’s never too early to start retirement planning and planning ahead of time with the right financial advisor can save you a lot of stress for your future.

Are you looking for the best investments for retirement in Bowral? Poole Advisory can help you put together the right strategy to achieve your financial goals. 

Book an appointment with us today!


Compliance Disclaimer:

This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns

Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917

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