The 7 Biggest Retirement Mistakes and How to Avoid Them
It’s easy to assume you’re going to be fine when you retire. People don’t want to think about that time of life, let alone prepare. Today we discuss how to avoid 7 of the biggest retirement mistakes before you make them.
But no matter where you are in life, you’re going to have to deal with this at one point or another. It’s easy to dismiss this, but if you do that for too long, retirement will show up and you will not be ready.
7 of The Biggest Retirement Mistakes and How to Avoid Them
If you’re going to gain the upper hand in your life, you’ll want to look at the biggest retirement mistakes that people make and how you can avoid them. The following will help you make gains, at any age.
Doing Everything At Once
It happens every year, those that have finally made it to retirement spend all of their money. They try to cross out everything on their bucket list immediately. They set up cruises, vacations, they take their families places, and they do it all.
They buy the nice home, a boat, and they spend a lot. That’s a bad idea. The reason why this happens is because many don’t budget out their years, or figure out the financial aspect of living more than a few years after retirement.
Just because you may not work full time, doesn’t mean that lavish spending is going to allow your money to last.
Driving and Buying Cars
When it’s time to call it a day at work, you shouldn’t keep ownership of many vehicles. This is going to be controversial, but it’s one of the easiest ways you can diminish your retirement funds. You will find that you may not need multiple cars, you may only need one. Furthermore, you may not need an SUV or a truck.
You may only need something simple to get around town etc. Could you walk, cycle or take public transport? It depends on where you're living in your retirement.
Moving To A New State
Regardless of where you will want to retire, you will need to really consider the cost of moving, and the overall price you’re going to pay in time. For instance, if you were to leave your state, you would still need to purchase a home in a new place, and then be stuck with a mortgage.
If you buy outright, there’s still the cost of maintaining your home, gardening, and other upkeep. Moving to a new state, settling down anywhere other than where you are at the time of retirement, will only introduce more and more expenditure. That’s not a good thing.
The Medical Element
Amidst the biggest retirement mistakes, you’re going to find that medical is a major issue. The problem here is that most people assume that they are going to be fine in old age. That can be wishful thinking, but you may fall, break a hip, or you may get sick and have to visit a hospital. Medical bills can cripple your budget, and Medicaid and other insurance plans may not cover everything.
Compound this with issues such as assisted living, hiring nurses, and other expenses, and you’ll find that not planning for medical issues can very well cause serious problems.
By the time you’re at retirement age, you may have a house paid off, you may have several cars, and a lot of overhead.
You should downsize, but you may not want to let go of the home you’ve invested so much into. Unless you’re going to have a handyman on payroll annually, you may want to downsize your home a bit.
Look at the market, hire a realtor, and see what you can do with your home. You may be surprised by how much you can sell your house for, and how it could help you sustain retirement for years to come.
Not Planning For Life
You’ve done it, you’ve reached retirement age, but now what? Some people live to upwards of 95 or even 100 years.
Will you have enough money to get you through those years? Having enough is great, planning ahead for your life is important, but what if you run out of money? Many of the biggest retirement mistakes involve not planning to live too long. You never know what your health may be like.
You may get more years than you know, and that will require you to have a little extra cushion of money.
Waiting Too Long To Save or Invest Your Money
Lastly, the biggest retirement mistakes can all be avoided right now, and it’s simply by saving more money. If you’re a young person, you may not want to think that far ahead, but it matters.
If you’re reaching retirement age, you should double down on saving and investing. Years fly by, and you want to make sure that you have enough income to sustain yourself without having to work a 40 hour a week job into your 70s.
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