5 Mistakes to Avoid When Saving for Retirement

Saving for your retirement is not getting any easier. We are in a slow-growth economy, many asset classes are overpriced, and costs keep going up. 

As such, you need to choose every month how to make ends meet while putting enough away for a comfortable retirement. This is even more important as we are living even longer. 

So you probably need to plan for 30-years, or more, or retired life. This is a big challenge and here are some mistakes which you should avoid when saving for retirement.

1. Not Starting Until it is too Late

Unfortunately, this has become a common problem. Many baby boomers lost their life’s savings during the dot-com bust and the housing bubble. What could be worse? How about not saving anything at all. 

Either spending your entire working life splurging on a luxurious lifestyle or never being able to make ends meet. Both paths lead to the same place – a retirement with little or no savings. So, stop thinking about it and start setting aside a bit of your income for retirement.

2. Poor Planning

As mentioned many baby boomers lost everything in the dot-com bust or the housing bubble. This is a symptom of poor planning and even worse asset allocation. You know the saying about putting your eggs in one basket. 

Well, a lot of people have done this whilst planning for their retirement. For some people is was relying on their pension, but then losing their job. For others, it was their 401K or their stock options. While others were just unlucky. 

Maybe they bought into the market near the top, or the held on for too long. Either way, they ended up losing close to everything.

3. We are Living Longer, More Active Lives

Don’t underestimate the impact of living to 90 or longer. 70 is the new 50, and people in their 80’s are regularly running marathons. 

Heck, my 80-year-old father-in-law still goes to work every day. Granted, he is not working like he did when he was 40, but he is remaining active.

What is the lesson in all of this? People are living longer, more active lives. As such, you need to plan for this. If you retire at 62 or 65, you need be ready for up to 30-years of retirement. 

This include being active and then the cost of assisted living and medical care later in life. One way to cover these costs is a reverse mortgage and this Q & A Series - How Does a Reverse Mortgage Work is a good start to see how it could help you.

So follow a cue from the Boy Scouts. Be Prepared. Know that it is highly likely that you will live into your 70’s, 80’s or beyond and have a plan to ensure that you can maintain your standard of living.

4. Working to Long

One of the best ways to save a little extra money is to continue working past retirement age. However, working too long can be a problem. 

Depending on the type of work you are doing it could the physical stress or mental stress. When you get older it is just harder to recover. As such, you want to look at your work plan and make sure you are not overdoing it.

It’s not just continuing to go full bore past retirement age. Working too much, such as getting as much overtime as possible, can be bad for you. 

Yes, you make more money, but you also risk working yourself to the point of exhaustion or worse. When this happens you not only end up losing out on potential income but you will also incur medical expenses.

The key is to find the right balance. If you need to keep working past retirement age, then find the right role to fit your needs. 

In most cases, it’s finding a position which will allow you to work 20 to 30 hours per week without all of the stresses associated with being a full-time employee or a manager.

5. Leaving Money on the Table

Let’s face it, almost no one works for the same company for 30-years anymore. Companies get bought, they downsize, they relocate. 

As you can imagine, this is bad for your retirement planning. Not only do you need to find a new job, but many people also withdraw funds from their retirement account to cover expenses.

This is not a good idea, especially if you can roll the fund over when you get a new job. Not only does this help you to minimize penalties. 

But you will also save on taxes and your retirement fund will continue to grow.

Balance Transfer For Better Loan Interest Rates

A home loan is generally for 20 years. It involves a great amount of money and hence the interest rate on the amount is a matter of concern for every borrower. 

If the borrower has diligently paid his EMIs for few years, he can look for reduction in interest rate. 

Nowadays the most common way to reduce the interest rate is to either go for balance transfer or talk to the bank that has provided you the loan to reduce it.

What is a Balance Transfer?

Balance transfer of a loan happens when the entire unpaid principal loan amount is transferred to another bank for a lower rate of interest. 

The bank that had originally extended the loan to you gets the unpaid amount and you have to, in turn, now pay your EMIs at the new rate to the bank that had taken up the loan. 

Almost every bank in the country has the facility for the home loan transfer and if you are paying your EMIs regularly, there often no problem associated with it.

How do Home Loan Transfers Work?

Home loan transfer works best if you are in the early period of your home loan. In such case even a 50 basis point reduction will be very beneficial. 

For example, if Rs 50 lakhs is left unpaid for your home loan and your current interest rate is 12%, you would have to pay Rs 58,01,513 as interest. 

If you opt for a balance transfer and your new interest rate is at 11.5%, your interest outgo over 15 years would be Rs 55,13,708. or a total savings on interest of Rs.2.87 lakhs. 

Generally banks do not like it that their diligent customer go to another bank, so in most of the cases the bank gets ready to either lower the interest rate or cut down the tenure period. 

Like if your loan still has to go on for 15 years then bank will reduce the tenure by 1 year. 15 year loans will be reduced to 14 years.

The choice between balance transfer and resetting a loan rate with existing bank at the end of the day depends upon the outstanding loan and tenure period left, the difference in rate and the time taken to get the work done.

Balance transfer is a simple process and it can be done with simply writing to your bank. You can also pit your bank against another bank which is offering you lower interest rates on home loan transfer. 

The other bank that gives you lower interest rate will check your credit background and if they are not satisfied with your creditworthiness they might reject your balance transfer application.

The main reason for borrowers to switch their loans is relatively higher interest rates from the existing lender. 

 When the Reserve Bank of India changes rates, lenders should comply. Sometimes even if they do cut rates the reduction may not be in line with what RBI did. Another reason for balance transfer may be unsatisfactory services or a need of a top-up. 

As we can observe that balance transfer is a time consuming and a tedious work, so one should properly weigh the decision of transferring the balance.

Mistakes to Avoid while Decorating Small Space

When you are staying in a not-so-big space, you must know the tricks of decorating it in the right manner. In a tiny room, the white paint will never look good. 

Like this, there are various mistakes that can be avoided while decorating a small room. Here are some of the mistakes that can be avoided.

Never Use Much Stuff: 

A tiny area must not be stuffed with a lot of furniture. Only single large furniture can actually make space appear larger than the original. 

If you possess a high ceiling, you can include a tall cabinet, which can attract the eyes to the upward. This will actually move the eyes away from the small square feet area of the room.

Be Wise To Select Color Of Walls And Floors:

You must take great care while selecting the colors of the walls and the floors. If you want to provide an illusion of a larger space, you can select lighter shades of walls as well as lighter shades of floors.

Play Safe: 

It can be less expensive for decorating a small room instead of a large one. You can use wallpaper or/and large printed fabric on the walls. 

You can easily provide a dramatic effect in the less-used rooms, so that they become a great place for spending time.

Apply Proper Strategies: 

When proper strategies are not applied, your room décor cannot appear good. You must divide the room into proper segments and decide the task zones, for example, relaxing, working, sleeping or dining. 

You can divide the sections geometrically like diagonally, in halves or quarters and can easily assign the tasks in each section. You can buy the ideal furniture from the home furnishing stores.

Never Miss The Luxury Treat: 

You can insert some luxurious items even in your tiny space. A mounted flat screen TV or a tortoise framed mirror on the wall will not take much space. 

You can use the customized sectional sofa for optimizing the space. Whatever you do, make sure that it creates coziness for your family members.

Do Not Depend On Small Furniture: 

With proper illumination, you can definitely use large furniture. Some dark colors and accessories can definitely make the room appear larger.

No White Walls: 

It is a misconception that white walls can make the room larger. Instead, if you can paint the room with gray , dark charcoal or the black truffles color, they will actually help in opening up space.

Never Be Wrong With The Scale And the Proportion: 

You must be good at calculating the scale and the proportion. The room must not look like it has been burdened with furniture. 

You can customize the furniture according to the size of your room. Keep the size and proportion factors in your mind like the height, width and the depth of the scale of your room. 

Never use furniture with a depth of 36 inches in a small room. Make sure that you are not inserting the furniture that is made for the mansions or for filling titanic spaces. You must remember that larger is not always better.

If you can avoid the above-mentioned mistakes, you can definitely come up with creative ideas for decorating your room. 

Make sure that you have a good sense of color, proportion and sizes before you start to decorate your room. You can even call professional interior designers, if you are not confident enough to do all the work on your own. 

If proper planning and strategies are applied, the end result can be more than what you had actually expected.

Author Bio: David Wicks is a professional interior designer who provides a B2B furnishings guide. In this article, he is providing some tips for avoiding the common mistakes while decorating small rooms.

6 Tips For Finding The Best Financial Plan For You in Retirement

Staying financially stable is definitely something that is not easy now a days. That is why it is essential for you to do all that you can to find a good financial plan. 

That way you can have a system that works for you to save money and stay on top of your finances. However, there are tons of different plans out there to choose from. How can you find the best plan for you? 

Here are just a few things to remember when it comes to searching for the best plan for you.

Your Age Matters

When you are young, your focus is typically on paying off educational loans and starting a rainy day fund. 

In mid-life, you are trying to build a diversified financial portfolio to save up for your retirement, because of that you will have to have difference financial plans at different ages. 

When you are nearing retirement age, your focus is on preserving what you have saved with low risk, reliable-yield investment strategies. So let your age lead you to a financial plan that works for your stage of life.

Consider What You Can Afford

Some financial plans are free to use as apps or online tools. Other financial plans may come with fees, such as making use of a professional planner's expertise. 

First, consider what you can afford based on what you plan to save monthly. If you can only save a little right now, give free financial planning tools greater priority.

Use Your Past Mistakes To Chart Your Future Success

The decision to adopt a financial plan is reason to celebrate. Don't let any past mistakes hold you back from the success you still have ahead of you. 

You can actually take what you've learned from your mistakes to look for specific safeguards that may keep you from making them again. 

For example, if you do better with an accountability partner, look for a financial plan that includes an online community where you can post your updates and celebrate others' successes as well.

Don't Let Poor Credit Hold You Back From Saving And Investing

Yes, it can take some time to recover when your credit rating has dipped below what you want it to be. But this doesn't mean you can't start saving and investing while you work to repair your credit. 

In the meantime, when you need a payday advance for saving, investing or emergencies, consider one that won't impact your credit. Life happens for everyone, but there are credit-friendly resources available to help you recover after the unexpected and get back to following your financial plan.

Strike A Balance Between Paying Down Debt, Investing And Saving

Your financial plan should support you and not the other way around. In other words, you should allocate some portion of your disposable income each month to paying down debt, some to saving for a rainy day and some to investing. 

In this way, you ensure your financial health for both the short and long term.

Take Full Advantage of Any Employer-Sponsored Financial Plans

If your employer allows you to contribute to a company-sponsored retirement fund, be sure to participate. 

This will allow you to sock away some money on a tax-deferred basis, which will also lower your annual tax income and thus, your tax bill. 

This is a win-win any way you look at it, and it also forms the basis of a solid financial plan you can continue until your retirement years.

These six tips can form a firm foundation to select a financial plan that can grow and change with you. Your chosen financial plan will give structure to your financial life and peace of mind in years to come.