Incorrect Pension Calculation Can Prove to Be Costly

Planning your post retirement life ahead of time is one task where one should feel free to invest as much as time into it as they feel comfortable. Be sure about your plan and then double check to be extra sure. That’s how important it is to ensure that when you retire and start your post retirement life, you don’t have to make any severe changes or cut down on things you like doing.

One of the biggest mistakes that can lead to a lower pension income is miscalculation which is why it is imperative that you check the numbers, recheck and then do it all over again and consult with a financial planner or retirement planning specialist. In today’s post we will highlight a few things that can lead to incorrect pension calculation. The idea is to inform the reader and viewers and safeguard them from making the same mistakes.

You pension income can be lower if all relevant compensations that you are entitled to were not included in the final tally. This includes commissions that you might have earned during your tenure. It also includes any overtime hours that you might have put in, especially during government holidays and Christmas time; any bonuses that you were entitled to. Overtime, bonuses and commissions are hard to keep track of depending on how frequently you get them. It is possible to miscalculate some numbers and then be left with a lower income in the end. Be sure you tally up everything you are entitled to.

Pension calculations should factor in all the years of service you did with a company. If you worked for multiple companies during your work tenure, then all those years must be factored in as well, even if its just months. This is something that many people forget because generally people shift through different jobs and companies by the time they retire. It is easy for them to forget about certain work tenures.

Using the wrong formula and interest rate will lead to a catastrophe in the end. In the same sense, using the incorrect social security data will often result in incorrect calculation. This is precisely why financial planners and retirement specialists are brought into the picture so that they can guide you through the process. They know the system. They know the perks. They can cut through the red tape and get you a higher number which you are by all means entitled to.

Sometimes it is the employer’s negligence that can cut you short. If they failed to make the required contributions to your pensions on your behalf, then you are short changed and left with little money to account for. Don’t let this happen to you. Follow up with all employers and see whether they are filing their contributions correctly.

Retirement planning is cumbersome but it is not impossible. Be sure to consult with a professional retirement planner. Don’t be left short changed. Protect your golden years and take action today.