Erickson Financial Solutions Blog
1-minute video: 5 Mistakes to Avoid in Retirement
5 Mistakes to Avoid in Retirement
Retirement offers many enjoyable opportunities. However, if you are not careful, many may never come to pass.
Mistake #1 Retiring with insufficient funds. We all started with nothing – or less. And we see lots of money in our accounts we can hardly conceive of how we might not have enough. But the truth is many people just do not do the number crunching to see if their nest egg can last. Unretiring is no fun and embarrassing Do the math or get someone who can.
Mistake #2 Spending too much too soon. Commonly people have many pent-up aspirations that they want to do right away. Many take money and doing them in quick succession can quickly deplete a significant nest-egg. Yes, retirement is a time to do the things you could never do while working but there is likely a balance between what you want to do and what you can afford. Find the balance.
Mistake #3 Healthcare costs. Healthcare cost have no where to go but up. Do you have enough budgeted? Many mistakenly believe Medicare will cover many cost. In fact there are many gaps in coverage relative to what you might have had while working. Investigate what you will get from Medicare and decide how you will handle the gaps if they arise.
Mistake #4 Taking Social Security Benefits too early. Social security was never designed and will never fund a comfortable retirement. And the dollars you get are greatly reduced from what you might expect if you take you benefits before your normal retirement age as Social Security defines it. For most, that age is 66 or older. Using your own assets and delaying retirement might be an alternative.
Mistake #5 Fail to make a estate plan. Estate planning deals, in part, with the disposition of your assets when you die. If you think you have trouble organizing them now, imagine how difficult it will be for your heirs when you are not around. Another area estate planning covers are health care decisions. You are one day likely going to need another person to help you make decisions and the time to make tentative decisions on life or death issues is now. Also, you need to find someone in whom you can place your trust in those final days.