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6 Mistakes You Make When Planning For Retirement | Comfort Keepers Delaware

Aug 31, 2018 by Comfort Keepers Newark, DE

A recent survey showed that just over half of Americans don’t think they’ll have enough money saved to have a comfortable retirement.

Interestingly, a whopping 78 percent of those who are already retired think they do have enough to live out their retirement comfortably.

Regardless of where you lie or your feelings about your current financial situation, there are some things that everyone should avoid to ensure their financial wellbeing during retirement. Here are 6 of these mistakes to be aware of:

Retiring Too Early

Many people assume they can retire comfortably when they can begin receiving payments from Social Security.

However, just because you’re eligible for this does not mean you should automatically retire. Did you know that the government actually gives more money to those who delay from Social Security payments? So, if you retire 5 or 10 years later than you originally thought you were going to, you could be making much more money while you’re retired!

Coming in with a Lot of Debt

Going into retirement with a crippling amount of debt is a sure-fire way to ruin your financial situation indefinitely.

Not making a continuous income makes debt especially dangerous for retirees, and for this reason, it’s important to pay off as much debt as possible pre-retirement.

Not Mapping Out the 3 Big Costs

When planning your retirement costs, most people underestimate (or even completely forget about) the arguably 3 biggest expenses you’ll face:

  • Healthcare costs
  • Long-term care costs
  • Emergency funds

Each component has subcomponents you need to worry about, too. For example, long-term care is not an upfront cost. It could mean the cost of the place you live, like an assisted living facility or nursing home, or a personal caregiver in your own home.

And, with emergency funds, you can’t map out what emergencies will happen, so the more you save, the better prepared you’ll be!

Putting Too Much Money into Your Home

When categorizing your assets and investments, a term you may be familiar with is “non-liquid.”

This means that whatever the cost of this property or belonging is cannot be readily converted to that exact cash value to be used for anything.

Your home is one of these non-liquid investments. Don’t tie up too much of your money in it because it because it could cost you a lot of money in the long run.

Spending Too Much Money Too Early On

Unfortunately, this is a reality for many retirees. Be sure to plan out a budget for your retirement, especially if you and your spouse are retiring together. It may seem like you have a lot of money from the start, but spending extravagantly up front could lead to one (or both) of you coming out of retirement to go back to work to help pay the bills.

Not Getting Professional Help

You may be spending too much money or missing countless tax deductions each year, all because you didn’t seek professional financial help.

Having someone knowledgeable to help you map out your retirement can help you ensure what you plan out will actually follow through like you’re expecting. Talk to a financial advisor or check out senior assistance programs near you or online that can help you plan out the retirement you want and can afford.

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