Top Six Money Traps to Avoid in Retirement

Retirement

Top Six Money Traps to Avoid in Retirement

Posted by Infinite Wealth Advisors, LLC
6 months ago | June 9, 2019

With regard to retirement planning, we tend to focus on savings. We advise you to start saving early, take advantage of all savings opportunities, and to save as much money as you can. And yes, growing a retirement nest egg is certainly important.

Retirement planning also requires a careful analysis of your spending. In particular, we’ve found that certain mistakes can become regrettable money traps for retirees. The most common ones are…

That huge house. With the kids grown, do you really need that enormous five-bedroom house? More importantly, can you afford the upkeep, taxes, and maintenance? Downsizing to a smaller and more affordable residence is often a smart move. It’s a relief, too, when you don’t have to clean three bathrooms anymore!

Grown children who need support. Unless your children are disabled and can’t support themselves, now is the time to help them fly the nest. Your income will be more limited soon, and it’s time to focus on yourself.

Medical expenses. According to a 2017 Fidelity survey, a couple retiring today will spend about $275,000 on out-of-pocket medical expenses over the course of their retirement years. Considering a health savings account now, along with supplemental insurance and healthy lifestyle changes, could help you brace for this considerable expense.

The cost of long-term nursing care. One in seven adults will someday need long-term nursing care, and yet only a small minority have purchased long-term care insurance. That’s something to think about now, rather than later, because premiums are lower when you’re younger.

Unexpected surprises. Whether the roof needs replacing or your car’s transmission dies, the unexpected surprises don’t stop when your career does. Make sure you’ve planned for these in advance, so you don’t have to raid your retirement fund.

Thinking that your expenses will decrease in retirement. Sure, you don’t have to commute anymore, and you can say goodbye to business lunches and your work wardrobe. But many retirees find that they have underestimated their actual lifestyle expenses, because they decide to travel or pick up new hobbies after they stop working.

These are just some of the more common money mistakes we’ve seen retirees make. Remember, retirement planning continues after this stage of your life has begun. So continue to meet with us, and we will help you anticipate future obstacles and make a plan to successfully avoid or conquer them.

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