The majority of us have already started ruining our retirement planning unconsciously. There are some common but impactful financial mistakes you can make during your career journey that can lead to the depletion of your retirement resources. It will not be so pleasant not to have any financial assistance post-retirement. So, planning for a future full of wealth is crucial. Let’s dig into those mistakes in detail.

14 Mistakes That are Ruining Your Retirement Planning

Here Are Those Common Mistakes Deteriorating Your Retirement Corpus:

1. Withdrawing From EPF

Every employee contributes 12 percent of his or her salary monthly to the EPF account. In addition to this, the employer is also mandated to contribute the same percentage to all employee’s accounts. The combination of these contributions creates a large corpus of funds for an employee during their career to access after retirement. However, many young professionals have started to withdraw amounts from their EPF in advance as pocket money. But they do not understand that they are destroying their retirement fund.

2. Not Considering PPF Account

PPF, or Public Provident Fund, is considered one of the most profitable, risk-free Government-backed savings schemes. It can offer you a large corpus of funds that an investor can utilize for his financial needs. For instance, a retirement fund, a child’s higher education, a child’s marriage, or any emergency that needs large amounts of money. So, not having a PPF account can be very troublesome.

3. Neglecting Health Insurance

One medical bill is all it takes to make a middle-earning individual bankrupt. Medical treatment is very expensive in our country. So, don’t neglect to buy Health Insurance.

4. Not Planning Emergency Funds

Always add an emergency fund to your financial planning. These funds are beneficial in times of desperate need that require money to eradicate the problems. Emergency funds can solve your problem with unexpected expenses.

5. Inadequate Retirement Funds

Financial independence and early retirement planning are a dream of every living soul. But don’t take it for granted and retire with a corpus that is not enough to fulfil your post-retirement expenses.

6. Paying a Lot of Investments

Before making an investment,, ensure you are not paying a high process or other related fees. Research properly and consider low-cost funds. You can also target direct mutual funds or NPS (National Pension Scheme) without any mediator.

7. Buying Low Budget Insurance

Buy insurance that is enough to cover your family’s medical expenses. You can lose your entire life savings with just one major medical bill. Moreover, in the case of life insurance, you should consider buying one that is enough to cover the significant expenses of your family in case of your death.

8. Starting Very Late

The power of compounding works when in the case of long-term investments. Starting late would not be the best idea. Your investments will not grow up to their full potential.

9. Underestimating Inflation

Underestimating inflation would be the worst mistake you can make. Your efforts to accumulate savings throughout your lifetime will be in vain if you cannot multiply them.

10. Not Considering Equity

Have a diversified range of investments in your account. You must include equity in your range of investments as it has a great potential to increase your investments.