Mistakes people make with their money before they retire.

As you are getting closer to retirement, you need to make good decisions on your money, as the impact will hit you faster than if you are in your 20s. here are 3 mistakes that people nearing rearing retirement make.

Take too long to pay off the mortgage:

Generally, we get pay raises over time, but too many people don’t up their mortgage payments. Taking too long to pay it off gives you less time to save for retirement. Knocking off the mortgage 5 years early can make a 6-figure difference to your retirement savings.  So, don’t take too long to pay off your mortgage.

Don’t up their savings when they have paid off the mortgage:

When people do pay off their mortgage, they don’t put extra funds into their retirement savings, they up their spending, take more trips, buy more stuff. This both reduces their retirement savings and makes it harder to adjust to a lower income when they do retire as their lifestyle spending is a lot higher.

Invest too conservatively:

They put their money into term deposits or savings accounts. They don’t take advice on risk, and so go for as conservative an investment as possible. Their idea of diversification is to have term deposits with as many banks as possible.

By investing too conservatively they lose out on big returns which makes retirement harder, and they don’t have good internal diversification.

So, pay off your loan faster, invest the mortgage payments, and don’t invest too conservatively to help you have a financially better retirement.