Why avoiding retirement planning mistakes matters
Planning for retirement is one of the most important financial journeys you’ll take – but it’s also one that many people get wrong.
Without the right approach, even small missteps can significantly affect the quality of life you enjoy in later years. From underestimating how much you’ll need to not fully understanding how your pension works, the consequences can be long-lasting.
Good retirement planning advice doesn’t just help you avoid problems – it helps you make confident decisions with a clear picture of what your future will look like.
The biggest retirement planning mistakes we see
Not starting early enough
It’s a phrase you’ve probably heard before: the best time to start planning for retirement was yesterday. The second-best time is today.
Time is one of the most valuable assets when it comes to retirement planning, especially when saving into a pension. The earlier you start, the more your money can grow thanks to compounding – where your investments earn returns, and those returns generate further growth.
For example, someone starting pension contributions at age 30 rather than 45 could end up with twice as much at retirement, even if they’re paying in the same amount each month. That’s the power of time and compound growth – and one of the biggest arguments for acting sooner rather than later.
Not knowing what retirement will actually look like
A surprising number of people enter retirement without a clear picture of what they want it to be.
Will you be travelling more? Downsizing your home? Supporting your children or grandchildren financially? Or simply maintaining your current lifestyle?
Without clarity on your future goals, it’s almost impossible to create a realistic financial plan. This often leads to underfunded pensions, poor income strategies, or financial stress down the line.
That’s why we always start with the bigger picture: what does your retirement look like? Once we know that, we can build a plan around it.
Underestimating how much you’ll need
Many people assume their expenses will significantly decrease in retirement – but that’s not always the case.
You may no longer be commuting or paying into a pension, but other costs often increase: healthcare, travel, home improvements, or helping family members.
Add in inflation and the fact that people are living longer, and it’s easy to fall short if you haven’t planned properly.
Professional retirement planning advice helps you forecast how much income you’ll need in retirement – and whether your current pension savings are on track. Tools like cashflow modelling can bring these scenarios to life in a realistic and practical way.
Not taking professional pension advice
One of the biggest mistakes we see is people trying to manage their retirement planning alone.
While it’s tempting to go DIY – especially with the amount of information online – pensions are complex. Making decisions like when to access your pension, how to draw income, or where to invest can have major tax and long-term financial implications.
Take this common example: someone accesses their pension pot at 55, thinking it’s the right time – but doesn’t realise it pushes them into a higher tax bracket. They lose thousands to unnecessary tax, when a more strategic approach could have avoided it.
Personalised pension advice from an experienced financial adviser helps you make smarter, more tax-efficient decisions – and avoid the mistakes you don’t even know you’re making.
Poor investment decisions
Your investment strategy should change as you get closer to retirement – but many people don’t adjust their portfolio accordingly.
Being too aggressive with your pension investments could expose you to market volatility at the wrong time. On the other hand, being too cautious too early could mean your pension pot doesn’t grow enough to support your retirement.
Many pension plans offer default investment pathways, but these aren’t necessarily aligned with your personal goals or risk profile.
With professional advice, your portfolio can be reviewed and rebalanced regularly to make sure it’s still working for you – whether you’re 20 years away from retirement or just around the corner.
Drawing your pension too early or without a plan
It can be tempting to dip into your pension as soon as it becomes accessible – currently at age 55 (rising to 57 in 2028). But doing so without a clear strategy can lead to serious consequences:
- You may trigger unnecessary income tax
- You could reduce the sustainability of your pension
- You might limit your future pension contributions (due to the Money Purchase Annual Allowance)
Instead of taking lump sums without a plan, it’s often better to explore phased withdrawals, flexible drawdown, or annuity options depending on your goals. An adviser can help you map out a tax-efficient withdrawal plan that supports your lifestyle without jeopardising your future income.
Ignoring tax planning opportunities
Tax is one of the most overlooked aspects of retirement planning – yet it’s one of the areas where the right advice can have the biggest impact.
Common missed opportunities include:
- Not making full use of pension tax relief
- Overlooking ISAs as a tax-free income source in retirement
- Failing to plan for inheritance tax or legacy goals
With smart tax planning, you can structure your savings and withdrawals in a way that keeps more money in your pocket – and potentially helps you pass more on to your loved ones.
How to avoid these mistakes with the right retirement planning advice
The key to avoiding these mistakes is to have a clear, personalised retirement plan – one that evolves with you.
That’s where professional advice makes all the difference.
At Chilvester, we provide personalised retirement and pension advice to help you plan with confidence. Our experienced advisers work with clients across Chippenham, Newbury and Bristol, helping them understand their options, make informed decisions, and avoid common pitfalls.
From projecting your future retirement income to choosing the right investment strategy and navigating tax efficiently, we’re here to support you at every stage.
Summary and next steps
To enjoy a secure and comfortable retirement, it’s crucial to avoid these common mistakes:
- Start planning early
- Understand what you want retirement to look like
- Don’t underestimate your income needs
- Take professional pension advice
- Review your investment strategy
- Avoid drawing your pension too soon
- Make the most of tax planning opportunities
The earlier you start, the more flexibility and confidence you’ll have.
Ready to avoid these mistakes and build a secure financial future? Contact Chilvester today for expert retirement and pension advice personalised to your goals. Let’s help you plan the retirement you truly deserve.
