5 Mistakes That Could Complicate Your Retirement


5 Mistakes That Could Complicate Your Retirement

Posted by RDW Financial Group
10 months ago | September 14, 2017

Retirement should be a time of relative ease. You can’t wait to simplify your life, ditch the work commute, and juggle fewer monthly bills. But there are no guarantees at any point in life. Remember to anticipate these five mistakes and plan around them, so that they hopefully won’t complicate your retirement years.

Saying “yes” when you can’t afford it. Kids really tug at your heartstrings, whether they’re 5 or 35. It’s hard to say no to your children when they need something. But unless you have a very compelling reason to do so, avoid financially supporting your adult children when you are living on a fixed income yourself. As you approach retirement, set expectations for children who are still living at home, and enforce them.

Risking too much. Often, riskier investments are also the ones that carry potential for the most growth. While some risk is probably acceptable in the middle of your career, you don’t have time to make up for losses now. As you approach and enter retirement, switching to a more conservative investment strategy might be a good idea.

Focusing on the short term. We all have both short- and long-term goals. But if you focus too heavily on the short term, you might feel tempted to make some emotional decisions. Always keep your long-term investment strategy in mind, so that you don’t panic or get too excited over temporary upswings and downswings in the market.

Ignoring the possibility of serious medical problems. None of us like to think of ourselves getting older, sicker, and more frail. But it’s common to need long-term nursing care at some point during retirement, whether for a few months or several years. Since you can’t predict the future, consider long-term care insurance or make sure your financial plan is flexible enough to cover this expense.

Claiming Social Security too early. Yes, you can first claim your benefits at age 62, but they will be permanently reduced by about 25 percent of their full amount. It might be tempting to retire early, but keep in mind that future cost of living adjustments will be based on that lower amount, too. Waiting just a few more years to claim Social Security can mean not only larger monthly checks, but an improved ability to handle inflation.

These are just some of the most common missteps you could make as you retire. Of course, the best way to anticipate and hopefully avoid potential problems is to work closely with a financial advisor. Give us a call, and we’ll help you put together a retirement income strategy that suits your lifestyle.


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