My Dad worked 40 years for the same company and received a very nice pension, along with their savings. Then he and my Mom moved from San Diego to Las Vegas and we spent many wonderful times together, for which I am so grateful.
For many Americans, they’ve worked hard for decades, pouring all of themselves into their work with the hope that one day, they’ll get an opportunity to step away from work to take full advantage of their senior years. However, you have to take intentional actions throughout your working life to ensure your retirement dreams come to fruition.
According to Kiplinger, here are some of the biggest retirement mistakes and how to avoid making them.
Relocating on a Whim.
Those pictures of some new and beautiful town are quite appealing. According to Kiplinger, “may folks have trudged off willy-nilly to what they thought was a dream destination, only to find that it’s more akin to a nightmare.” Their advice is to test the waters and have a good plan before you make a permanent move.
Planning to work forever.
Many people work beyond retirement age either because they have to or because they want to.
But unexpected things can happen and you could be forced to stop working. Their advice: “Assume the worst, and save early and often.”
Putting off saving for retirement.
Retirement is expensive. You will still need to pay for housing, health care, and food at a minimum, as well as fund whatever other goals you may have. Without sufficient savings tucked away, you may be further from retirement than you think.
Ignoring long-term care.
Many seniors imagine retiring at home, surrounded by their spouse and children, but this isn’t a reality for everyone. You could develop dementia or experience physical challenges that require you to reside in an assisted living facility. Medicare does not cover the costs, which can exceed $5,000 per month or more. Get a plan in place now to ensure you cover all your bases.
Neglecting estate planning.
Most people understand the importance of an estate plan, especially those who have previously experienced probate. However, many people wait too long to establish their plan. Retirement is an ideal time to review existing estate planning documents or create new ones.
Buying into a timeshare.
It’s easy to see the appeal of a timeshare, but the maintenance fees add up. Also, the timeshare market is rife with scammers. If you want to get rid of a timeshare, Kiplinger suggests you first contact your timeshare management company about resale options. If that leads nowhere, list your timeshare on established websites such as RedWeek.com and Tug2.net. Alternatively, hire a reputable broker. If all else fails, look into donating it to a charity (but first check with your tax advisor.)
Failing to plan how you’ll fill your free time.
According to Kiplinger, it is critical to plan your free time in retirement as thoroughly as you plan your finances.
If you want more guidance on retirement savings, Kiplinger has many great articles and a six-week series on how to invest for retirement.