Greetings! I trust that this will find you well and enjoying life.
Here are some common financial mistakes people fall prey to as they approach retirement. Do a quick check to make sure that you avoid them.
In Your 40s and 50s
Trying to keep up with the Joneses. Appearances can be deceptive. The nice homes, cars, vacations, and “stuff” that others might make you wonder whether you should be buying these things, too. But behind the scenes, your neighbors could be taking on a lot of debt. Take pride in your savings account instead.
Funding college over retirement. In your 40s, saving for your children’s college costs over your own retirement is a mistake. If you have limited funds, set aside a portion for college but earmark the majority for retirement. Then sit down with the teenager and have a frank discussion about academic options that won’t break the bank-for either of you.
Not having a will or an advance medical directive. No one likes to think about death or catastrophic injury, but these documents can help your loved ones immensely if something unexpected should happen to you.
In Your 50s and 60s
Co-signing loans for adult children. Co-signing means you-re on the hook – completely- if your child can’t pay, a situation you don’t want to find yourself in as you’re getting ready to retire.
Raiding your home equity or retirement funds. It goes without saying that you doing so will prolong your debt and/or reduce your nest egg.
Not quantifying your retirement income. As you approach retirement, you should know how much you can expect from Social Security (at age 62, at your full retirement age, and at age 70), pension income, and your personal retirement savings.
Not understanding health-care costs in retirement. Before you turn age 65, review what Medicare does and doesn’t cover, and how gap insurance policies fit into the picture.
If you have questions about your retirement planning don’t hesitate to contact us.
Jeff Christian CFP, CRPC