The Open Market Option was one the most important breakthroughs for consumers looking to get the best deal for their retirement as they approached the end of their professional working life.
Introduced in 1975, the Open Market Option empowers individuals to shop around rather than simply taking the default rate of their pension provider. Below are 5 common mistakes consumers must steer clear of to make the most of this great opportunity to find the long-term personal saving plan that’s right for you.
1. Changing your goals
Like many projects and activities, momentum can be everything with saving plans. If you’re already saving, keep going – it’s an infectious and rewarding habit to get into.
Make saving for retirement a priority early and stick to the commitment. The sooner you start saving and building up your reserve of funds, the more time your money has to grow. Come up with a plan with clear, achievable goals and set to it!
2. Not knowing your retirement needs
Retirements continues to grow in length, with many individuals now enjoying over 20 years free from the working world after the end of their professional careers. This makes retiring one of the most expensive, defining moments of your life.
Experts believe retirees should require between 70-90% of their pre-retirement earnings to maintain a certain standard of quality of life depending on their income (high to low, respectively). Planning ahead, being honest and keeping things achievable and realistic in your goals and expectations is key to avoiding disappointment and disaster. Research and decide upon what you will be want and need in your retirement and plan accordingly.
3. Dipping into your savings early
Withdrawing money early from savings plans such as annuities can lead to value being lost through taxes and penalties.
Remember: when setting up a long-term savings scheme you are planning for your future retirement. Such personal saving strategies should not be treated as an easy-access account for funding extraordinary purchases or boosting your lifestyle in the short-term. Don’t waste your money on early withdrawals. Stay the course and reap the benefits in your later years.
4. Settling for a raw deal
The Open Market Option gives you the power to shop around and find the best deal before entering retirement. Settling for an inferior or insufficient deal when it comes to your future is no longer an option.
Not taking up the opportunity to see what’s out there is tantamount to dismissing a fantastic amount of extra value that may be on offer from a competitive alternative.
5. Failing to ask questions
If something doesn’t look or feel right about a package, or you feel that you need more information, always ask the relevant questions to find the answers you seek.
When it comes to securing your future, there are no bad questions. By educating yourself and getting informed on personal savings, annuities and financial planning, organising your retirement becomes far more manageable and understandable. When in doubt, just ask!