How to avoid the biggest mistake when you retire
When it comes to thinking about your retirement, it is very easy to imagine sitting back, doing as little as possible, enjoying the autumn of your life. What you should be thinking of is how you can avoid financial stresses and strains when you get there! To avoid these, you have to avoid making the biggest mistake most retirees make.
Don’t give up all your active income
Active income is the money you make from slogging hard or what you generate from your business. Active income is the opposite to passive income which you will get from your pension or retirement annuity. If you work more, you can increase your active income. You can only increase your passive income by getting better returns on your investments.
Most people who retire, give up their active income and this has 2 negative effects:
- The longer you go without your active income, the harder it is to get it back.
- Relying on your passive income means inability to make good investment decisions.
The dream of a retirement where you follow your dreams, never realise for most people. To achieve this lifestyle of luxury in your golden years will take a very large pension or retirement fund. To achieve that lifestyle means opting for riskier investments in the hope of bigger financial rewards and the potential to devastate your retirement dreams.
Part-time work after retirement has plus points
The way to take the pressure off your passive income is to work. Many retirees find that working makes them feel better about themselves too. It doesn’t mean slogging away full-time. There is a variety of things you can do to generate an active income. Look at part-time opportunities which could be consulting work related to your previous employment. An online business doing something that you love, is also an option.
In your own business, you can still be involved in running the company, while others can do the lion share. By generating an active income, you make more money and don’t have to worry about your investments. This way you enjoy your retirement.
That’s the way to avoid the biggest mistake you can make when you retire.