When you build your retirement funds, you have something to look forward to once you retire. If you’re an ex-pat, you will feel excited to go back home and enjoy the fruits of your hard work. However, you might commit mistakes that will harm your savings. Make sure that you don’t do them, or you will risk financial insecurity. These are the common mistakes people commit close to their retirement, and what you can do to prevent them.
Quitting your job
If you’re only a few years away, you might think about quitting your job now. The problem is that you can’t touch your retirement funds yet. The investment isn’t mature enough for withdrawal. If you do it now, the interest will still be terrible. Sure, you already feel exhausted working away from family, but you have to be a bit more patient. In a few years, you won’t have to work hard anymore. You can enjoy your retirement life with your savings. You can go back home and be with the people you love.
Not saving now
If you started building your retirement funds earlier in life, you could expect a significant amount during retirement. It’s a problem if you didn’t do it. You’re only a few years away from retiring. Even so, you still have sufficient time to start saving. Make the most of your time and build your funds from scratch. The final number might not be too big, but it’s better than nothing. Besides, you’re still earning well as an ex-pat, so you can keep on investing. Get help from experts on QROPS pensions to help you in this process.
Poor tax planning
There are tax issues involved with retirement funds. It helps if you understand this complex issue so you can do better tax planning. Otherwise, you will feel surprised that you have to pay for a lot of things. Talk to tax experts now and let them explain to you what you have to prepare.
Cashing out your savings
Never touch your retirement funds until you retire. Withdrawing a lump sum amount is also a terrible option. Again, there are lots of fees that come with the immediate withdrawal of funds. The best option is to spread your savings for several years. Ideally, you should only withdraw 3 to 4% of your portfolio in a year. It helps you remain financially stable for the rest of your life. You can’t spend money as you did as an ex-pat.
Not budgeting ahead
Even if you love budgeting your income, it’s a different story once you retire. You don’t have the same salary anymore. Your income as an ex-pat is way higher than what you will get later. You might have to adjust your lifestyle depending on your needs. You also need to sacrifice several expenses. Practice budgeting your money with minimal income. Once retirement arrives, it’s easier to make the most of what you have.
Hopefully, things will turn out well. Not all retirees are happy with their lives because of financial problems. You don’t want to end up like them. Be financially responsible and keep building your retirement fund. You will also enjoy retirement life if you are financially secure.