Retirement is no time to make careless financial errors. Hopefully, you have a retirement plan, a retirement budget, and retirement savings that allow you a high level of comfort; hopefully, you can rest assured that your retirement is safe and financially secure.
Even those with stalwart retirement plans in place need to remain vigilant, however, and avoid making clumsy mistakes. Here are five especially common ones to avoid:
Throwing out your retirement plan. You can work on your retirement plan for years, building toward that moment when you quit your job and are able to finally kick back and enjoy yourself a bit—but just because you make it to that point, that doesn’t mean you can throw out your financial plan! You should still meet with your advisor at least once a year to ensure your portfolio and your budget are on track.
Ignoring the costs of healthcare. When you’re 30 years old, it is simply impossible to know what kind of healthcare costs you will need to budget for. Once you hit retirement, you can hopefully start to make some slightly better-informed estimates. Make sure healthcare is always part of your retirement plan, and a part of your conversations with your advisor.
Not downsizing when you really need to. Not every retiree will want to downsize immediately. However, if you have always planned to downsize, if you need to downsize, and if there is no reason not to downsize, then it is prudent to do so sooner rather than later.
Forgetting the rules of your retirement account(s). How often are you required to take a withdrawal from your retirement account, and how much does that withdrawal need to be? Make sure you are clear on these points, to avoid potential penalties, taxes, and fees.
Failing to review your estate documents. Finally, retirement is a time to shift focus to your estate planning. You should review your estate planning documents annually, ensuring everything is up to date and that your estate will be executed as smoothly as possible. This will ultimately make life easier for you and for the members of your family/beneficiaries of your estate.
Retirement is to be enjoyed, not stressed over—and a sound retirement plan can help you accomplish that. Just make sure to stick to your plan, rather than fall away from it, once retirement comes.