5 Retirement Mistakes to Avoid
Filed under: Retirement
When we talk to our clients about retirement planning, we often focus on what they should do. Together we set goals and establish sound savings strategies.
But you could also look at it another way. What mistakes have others made in retirement, and how could you learn from their misadventures? The following five mistakes are the most common.
Relying upon the equity in your home. Many people plan to cash out their home’s equity and use that money to fund their retirements. The problem with this plan is that the real estate market is unpredictable, as we have all learned in recent years, and your home might not be worth as much once you finally retire. If you’re able to make a profit from it, then that’s great news, but don’t count on it. Make sure you establish some other form of retirement income.
Underestimating medical expenses. Ask any 60-year-old how much they expect to spend on health care in retirement, and then check on them a decade later. In almost every case, that person will tell you they underestimated their medical expenses. Most of us will experience a greater degree of health problems as we age, and the cost of health care rises every year. Consider whether long term care insurance or Medicare supplemental plans could help you to manage expenses.
Failing to guard your credit rating. You might think that because you don’t plan to purchase another home or car, your credit score doesn’t matter so much anymore. Retirees often get lax about making timely credit card payments, and even a late cell phone payment can go on your credit report! But your credit rating is always important, because it affects things like car insurance rates or your ability to access a loan in the event of an emergency. Continue to protect your credit score just as you always have.
Taking on too much debt. It’s tempting to live it up once you finally retire, and charge a few too many restaurant meals or cruise tickets. We want you to enjoy your retirement, but make sure you can pay off these debts quickly. You don’t want to overextend yourself now that you’re living on a fixed income.
Failing to seek expert advice. The decisions you’re making right now are some of the most important ones you will ever make. Don’t leave it all up to chance. Seek expert advice now, so that you can be prepared for any situation that might arise in retirement. Call our office to schedule an appointment, and put our years of experience to work for you.
