A 2017 study by Aviva in the UK revealed that 1.3 million people viewed “winning the lottery” as their only plan for retirement. The article will discuss common mistakes that people make when planning for retirement and the true cost of failing budget and save correctly for the future.

One of the most traumatic events in a person’s life is retirement. It may not seem that way looking forward, but looking backwards after the event it is perfectly clear that the ability to turn the clock back has gone.

For many, if not most people, the word retirement is an expression for “old folks”. Yet as they themselves approach the age of retirement from their regular employment, the spectre of a diminished lifestyle looms on the horizon.

• What will I do with all that time?

• Will I have enough money to last the rest of my life?

• How will my health become affected as I get older?

All valid questions. And to varying degrees, some will play a more important role in life for some people and less for others. Obviously, the financial issue is critical and if your retirement fund will be adequate for the long haul, you expect to be comfortable. Perhaps the question thus becomes: how long will I live?

So, the earlier you can look ahead to those years and forecast your retirement income and expenses the better chance you will have to meet your goals. The longer you put it off through fear of finding out that you simply will not have enough or that you’re just scared of getting older, the worse it will be.

But the retirement years carry so much more concern and worry than simply money.

The biggest concern about retiring is “boredom”. Our grandparents perhaps could only look forward to a few years in retirement and while health was a concern, it may not have been a long-term issue, unfortunately. However, the healthcare “dividend” over the last few decades has resulted in a life expectancy factor much higher than our grandparents.

We can easily look forward to ten, 15, 20 years in retirement. Something like half of our working years can be expected. Spending that amount of time without a game plan will be a very difficult period in your life. To make matters worse, if you choose to be “laid back” for all those years, health concerns will accelerate in all probability.

Being gainfully employed in the working years is critical to a stable lifestyle. But being gainfully occupied in the retirement years is equally critical to a satisfying retirement. Playing golf every day, or gardening may be things to look forward to, but the sustainability of those pastimes will wane quickly.

You want to be “useful” — be that to your family or your community. You may wish to be compensated for your endeavours or you may be perfectly fine with voluntary efforts. Hopefully your financial planning does not demand that you must be paid to bolster your retirement income in order to survive. That would not be good at all.

On the other hand, if you believe that you have worked so hard for so long that you are now justified in “letting go” — travel around the world, eat at fancy restaurants, drive an expensive car, wear designer clothes, etc, then so be it. But if your plan is to spend every penny as fast as possible, then you must ensure that you have enough pennies to do the job.

And don’t forget to recognise that the “unexpected” can arise, easily and severely. Health insurance may be adequate for typical ailments but may run out for serious matters. The house may need serious repairs. The new car is now a must. The family runs into financial problems and you are the “go-to bank”. It is difficult to predict the unexpected, but it is necessary to acknowledge it could happen and that using longer-term funds today, may cause cashflow returns to be diminished down the road.

Planning for the retirement years may be driven by money but it is important that you enjoy those years. Staying at home most days, not able to go out and do anything meaningful, being tired of the television and so forth, is not a plan — it’s a penalty.

Your plan for the future must be carefully structured, reasonable and provide you with enough fun to keep you going for a very long time. Think carefully — but think.

• Bill Storie is co-founder and chief executive of The Olderhood Group, a leading organisation in online information for people planning or presently in retirement