What Retirement Errors Should I Avoid?
The retirement years: for some, visions of cruises, trips to exotic locations, exciting experiences, and catching up with family and friends come to mind. Basically, retirement would be synonymous to enjoying the rewards of a lifetime of work.
Of course, there isn’t a clear-cut image on what the twilight years may bring. But without the proper preparation and planning, those visions may just end up as dreams.
And it couldn’t be stressed enough that the right kind of planning is needed. A recently published article on Forbes highlighted several instances why most elderly have a skewed view on the retirement years. From realizations that life after years in the workforce isn’t that colorful to scrimping down of daily expenses, the majority of retirees feel that they should have done things differently when they had the chance.
There are some things in life that we wish we can do-over, but to make the most out of what we have, we can simply learn from our mishaps. Unfortunately, the same cannot be said with retirement.
Some of our relatives who have retired can let us know about their mistakes, but we can only learn so much. Articles like the one Forbes posted above can enlighten us, but often only when it’s too late. So let’s take this opportunity and identify particular areas that need to be addressed when it comes to retirement planning. Knowing where we may do wrong may help us prevent uncomfortable and stressful situations during the retirement years.
What retirement errors do we need to be wary of? Let’s find out below:
Neglecting your Health
We all had our peak moments with health, but with retirement, everything slowly goes downhill. Visit your doctor for check-ups quarterly to keep you in good health.
You may not have to worry about any hospitalization bills before because you were in good shape, but retirement can be full of surprises, and most of these can be expensive.
After all, prevention is always better than treatment. Aside from visiting your doctor, consider keeping and staying fit. There are several workout routines that the elderly can do. A healthy diet may also do wonders with your life. Exercise, if done properly, may also lower the risk of being diagnosed with diseases such as cancer.
Relying too much on Social Security
Some of us are under the impression that we can live on social security. The truth is, social security must be treated as an emergency fund contributor and not as a source of income used for daily expenses.
Taking money out of your IRA or 401(k) too soon
The idea of having an IRA or 401(k) is to have a significant fund for the future. Leave it where it should be and only take it out at the right time, mainly during retirement. Remember, it’ll always be best to save some money for a rainy day. In this case, the “rainy day” is retirement.
Misinformed on Medicare and Medicaid
For long term care costs, most retirees would mistakenly rely on insurance programs such as Medicare and Medicaid. This mistake may prove to be fatal: Medicare will only pay for a limited duration in a hospital (which defeats the purpose of paying for long term care). Medicaid benefits will only be given out if the applicant first has his or her assets down to a designated limit (poverty-level).
Retiring too soon
Retiring too early will only lead to two things: an earlier halt of stable income and a longer retirement which means you’ll drain your savings quickly.
Of course, it depends on one’s life circumstances. If you can manage and afford to retire earlier, then good for you! You get to reap your rewards earlier than most!
But generally speaking, retiring at a later part in life allows one to save more money. A larger amount of funds in a nest egg may as well equate to better and secured financial stability, which isn’t a bad resource to hold to in case something happens in the future.
Having unpaid debts
Before you enter retirement, be sure to pay off all your debts or credit cards. Debts are one of the things you can do without especially in retirement.
Not saving up for retirement
The thing about retirement is that your income stops unless you have other sources of revenue or businesses. Some save for retirement too late while some are not able to save at all. Ideally, during the time you get a raise is also a good chance for you to save. Just put away your raise and continue to live on the amount you were getting before.
Retirement has to be planned. You can’t expect to jump right at it and be happy. Most of retirement planning relies on being financially ready. Take time to save for retirement before making these errors. Additionally, make sure that you have your long term care needs secured. Read more here to find out how to request for long term care quotes.