Watch Out For These Retirement Planning Surprises

Filed under: Retirement

As Alexander Graham Bell once said, “Before anything else, preparation is the key to success”. When it comes to retirement planning, preparation and early planning can help make a large impact upon your retirement goals. Since a large part of preparation involves learning from the mistakes of others, remember to watch out for these surprises as you work toward a comfortable retirement.

Don’t miss the deadline to contribute to your IRA. Your IRA offers you a valuable opportunity to set aside money for retirement. But in order to reap the tax benefits, you have to make your yearly contributions by April 15 of the following spring. Instead of waiting to write a check just before tax time, consider setting up a schedule for automatic contributions.

Don’t fall into the reverse mortgage trap. A reverse mortgage can be a smart move for some people, under very specific circumstances. But for everyone else, tapping into their home’s equity to fund retirement can add up to a big mistake. Before making this move, consult with us about retirement income options that might be better for you.

Watch out for “dream” retirement communities that sound too good to be true. Unfortunately, many scammers and shady businessmen like to prey on senior citizens. While there are some legitimately wonderful senior living options out there, remember that if something sounds too good to be true, then it probably is. When investigating various retirement communities, make sure to ask about hidden fees such as homeowners association dues, maintenance fees, and so on. Often the true price of your purchase is reaped through these extra expenses.

Look for hidden 401k fees. While managing your 401k fund, take a closer look at your expense ratios. A difference of one percent might not sound like a big deal, but consider the cost of interest lost on that money over the years. In general, it is best to look for fund options with lower expense ratio, although in some cases you might decide the potential benefit of a particular option is worth the higher fees.

Remember, the fact that you have accumulated cash and a need to invest makes you a prime target for those who seek to take advantage of you. You can always call our office and schedule an appointment to discuss retirement planning options, and we will be happy to help you make smart, safe choices with your money.

15033 – 2015/11/16