Retirement is supposed to be a time of serenity, where you get to enjoy your decades of hard work, sacrifice and prudence. However, making mistakes in retirement can deplete you of the precious funds needed to fund the lifestyle you want, which is why the following errors must be avoided.
Disregarding Medical Care Costs
Research shows that one of the leading causes of bankruptcy in the United States are medical bills. And those at retirement age and beyond are the most susceptible to developing health problems which can be financially crippling to treat. This is why you need good insurance but just as important, you must not neglect your physical fitness after retirement. Resist the tendency to lounge around all day in the easy chair, because the more time you spend in the gym, the less time you’ll spend in the emergency room.
Continuing to Carry Debt after Retirement
By the time you retire, it is absolutely critical that you eliminate most or all of your debt. This is because once you’re no longer working; you won’t have the steady income to cover the interest payments. Furthermore, if you have children and grandchildren, you should want to pass down wealth to them without having to pay a large portion of it to lenders.
Not Writing a Will
No one wants to think about their death, so it is easy to put off writing a will. However, doing so is a mistake, especially if you have a great deal of wealth. If you haven’t written a will that specifies who gets what in the event of your demise, it creates an unpleasant situation where your descendants will battle each other in court. Not only will this tear your family apart, but your family members will end up paying huge amounts of money to lawyers, funds that should and would have gone into their pockets had you simply written a will.
Conducting Early Retirement Withdrawals
If you’ve placed your savings into a retirement plan such as a 401K, there are often tax liabilities if you decide to withdraw early. This is why a lot of experts recommend planning your savings/investments in a way where they will mature by the time you reach forty. This way, some funds will come to you that can be applied towards purchasing a home without having to worry about diluting the returns.
Only Saving in Cash
Most financial experts recommend saving money, and the majority of people save in cash, whether they keep it in a bank or a safe. The problem with this is that inflation will inevitably eat away at your savings as the decades pass, which reduces its purchasing power.
This might put you in a situation where you retire only to find that the money you amassed is not enough to cover the lifestyle you had planned. The solution to beating inflation is to take your cash and convert a portion of it into gold or silver. Experts recommend ten to twenty percent, which means that if you have $150,000 in cash you want to put $15,000 to $30,000 into silver or gold. This will protect you from inflation and preserve the purchasing power of your wealth.
