With retirement comes the opportunity to slow down and start to live life to the fullest. However, some people make mistakes in retirement that cost them money, time and relationships. If you are in the process of retiring, make sure you don’t do the following nine things.
1. Leaving Your Job Before You Are Financially Secure
It’s not uncommon for a lot of people to start thinking about quitting their job to retire when they get in their late 50s or early 60s. However, you do need to keep in mind that there is no right or wrong age to retire.
You should never leave a job before you are financially secure just because you feel that it’s now the time to do so because of your age. If you don’t wait until you have enough capital to live off of, you will find that you struggle during your golden years.
It’s not uncommon for a lot of retirees to enter back into the workforce because they ran out of funds.
2. Spending Frivolously
Even if you think you have the finances to retire, it doesn’t mean that you should just consume frivolously. You need to know where your money is going so that it will last as long as possible. This is why it’s a good idea to create a budget.
Having a budget doesn’t mean that you need to be so frugal that you don’t enjoy your retirement.
When creating your budget, you should set aside some dollars for things like eating out or traveling. Any amount you have leftover each month should be put in a savings account that has a decent interest rate.
3. Making Unwise Investments
A lot of retirees think that because their kids are grown and they no longer have a family to support that they should invest as much as possible. While investing in diversified assets can help you build additional wealth, this is only true if you do it wisely.
Don’t invest in anything that’s too risky or seems like it’s too good to be true.
It’s not uncommon for many retirees to lose out on a good chunk of money by not fully researching potential investment opportunities. If you want to invest you should talk to a financial advisor to get their advice first.
4. Not Filing Your Taxes
Just because you are retired, it doesn’t necessarily mean that you no longer need to file takes. If you have retirement accounts, you will need to pay taxes on them. The same is true if you get Social Security benefits.
Because you are probably now in a new tax bracket and different tax laws may apply to your situation, you should seek the assistance of an accountant.
They will make sure that you are taking advantage of the right deductions and that you aren't hit with any penalties because you failed to file your taxes correctly.
5. Going Into Debt
Now isn’t the time to take on a lot of debt. Being that you are no longer working, you will probably have a difficult time trying to pay back any money that you borrow.
Before you make any big acquisitions or swipe your credit card that the cash register, you need to think about whether or not you will be able to give it back in a short amount of time.
You don’t want to have to clear out your savings accounts just to pay off all of the debt that you accumulated.
6. Failing To Plan For Healthcare Costs
As you age, healthcare costs often continue to rise. Even if you have adequate health insurance, you may find that you are having to spend a substantial amount on things like copays and prescriptions every single month.
Because of this, you need to try to take these costs into consideration when you are heading into retirement.
Now is a good time to read your health insurance policy to see what is covered and whether or not you need to increase your coverage.
You should also set aside capital in a separate account to cover unexpected health-related expenses. This will ensure that you have enough for medical expenses if necessary.
7. Filing For Social Security Before Your 70
Once you turn 62, you may be able to file for social security. However, the benefit will be higher if you can wait until you are 70 years old. For those that are healthy, it makes sense to wait to file so that they can qualify for as much as possible.
8. Isolating Yourself
After spending years in the workforce or taking care of children or other loved ones, you may be ready to enjoy some time to yourself. While it’s perfectly fine to want some alone time, you shouldn’t completely isolate yourself.
Try to balance the amount of time you spend by yourself with how much time you spend with others. Make it a point to call one of your friends or loved ones each day.
Go to lunch, a friend’s house or to the park or your local library at least once a week so that you can have in-person interactions with others.
9. Lounging Around All Day
You certainly have earned the right to spend your days doing what you want. Nevertheless, this doesn’t mean that you should just lounge around all day.
If you want to spend the rest of your days healthy and happy, you should make it a point to be active and get out of the house often.
It’s a great time to take up a new hobby that you always wanted to do but never had time for. You will find on this page many ideas of what to do of your retirement time. Also, you should try to be physically active on a regular basis.
Even a walk around the block every day can improve your health as well as your frame of mind.
While retirement can be an enjoyable time for most people, you need to make sure that you are doing things the right way. This will ensure that you have enough to last you and that you are healthy and happy for years to come.