Like with any major stage of life, transitioning into retirement requires careful and considered planning. If you’ve worked all your life, there are lifestyle and economic issues to consider which can be overwhelming. Unless you are an expert in finance, it can be hard to know where to begin and what type of behavior to avoid. To help ease you into retirement, here are five of the biggest planning mistakes you must avoid.
Failing to Plan
We all know the saying ‘fail to prepare, prepare to fail’. When you consider that 64% of Americans don’t have a plan in place for retirement, this is undoubtedly one of, if not the biggest retirement planning mistake to avoid. Although it can be daunting to think about the future, taking time to think about your retirement can not only give you peace of mind, but reassure those around you that you’re ready and prepared. Making an investment plan that maps out when you plan to retire as well as how much annual income you expect to receive can make a big difference.
Lack of Preparation for Medical Expenses
As we get older, our health begins to deteriorate, meaning that our need for medical care will increase. With Medicare only covering 80% of most (covered expenses), many people make the mistake of not preparing for anticipated medical expenses, whether it be hospital stays, surgeries, or medications – all of which can eat into your retirement savings. You will need to work out whether your insurance or savings will be enough to cover your medical care.
Not Taking Advantage of Opportunities
We all want our retirement to be smooth sailing, so while you may dream of picking up your gold watch and going off into the sunset, there are tons of opportunities which you can use to top up your investment. It’s important that you look at various options like government co-contributions and salary sacrificing which can help to ensure your nest egg is healthy and stable. To explore what’s available to you, seeking advice from a qualified financial planner can help.
Postponing Saving When Younger
A little can go a long way, so putting some money aside each month for your retirement fund can take the pressure off, allowing you to enjoy your final stages of life with financial comfort. If you haven’t been careful with your money throughout your working career, the alternative option you have is to carry on working and contributing to your social security for as long as you can. To save money where you can, you may want to check out a massive compilation of online discounts on all your everyday essentials.
Where you live in your retirement is incredibly important. It’s only natural that you will want to find somewhere where you feel comfortable and safe, so doing your research before relocating is crucial. While many of us want to take things slower in retirement, others can get bored very quickly, so it’s best to try renting before you purchase a property in a new location. If you don’t feel comfortable somewhere, this can have a huge impact on your physical and mental health, so going through your options and working out what sort of accommodation is right for you can take the weight off your shoulders.
Planning ahead for your retirement is crucial. While it can be a frightening prospect, getting your finances in order and working out where you want to live can make a huge difference. Having an investment plan in place, being prepared for medical expenses, and saving throughout your working career can help ensure you’re ready for retirement. It’s always best to seek advice from your friends and family if you’re unsure on what to do. Reaching old age is inevitable, so laying down your wants and needs from the get-go is important.