Despite the aging that comes with it, most of us look forward to our golden years as some of the best years of our life. A time when we can relax, take multiple vacations a year, and complete DIY tasks without interruption or responsibility.
At least, this is what your golden years should look like after a lifetime of hard work and saving your hard-earned money. But the numbers don’t lie — more than 15 percent of Americans do not actually plan for their retirement and have no savings to fall back on.
If you don’t want to fall into this percentage of people, here are the senior money mistakes to avoid before retirement hits.
1. Poor Long-Term Planning
No matter much how you save and invest throughout your lifetime, there is no way to know for sure that you have enough money to last the rest of your days. And when it comes to your golden years, the key is to live comfortably, not just survive.
Bear in mind that general life expectancy has changed, and continues to do so as long as medicines, healthcare services, and nutrition improves. This means that you might live longer than you think, which means your nest egg needs to see you through.
That’s why establishing passive sources of income during your retirement is key. Or, you’ll need to form a solid money saving strategy and continue adding to your nest egg as you age.
2. Continuing To Support Family
By the time you reach your golden years, it’s fair to say that you’ve done your time supporting others. This might include your children, siblings, or other family members. When it comes to planning your retirement, it’s time to cut off these lines of support and start focusing on saving that money for your time in the sun.
It’s not selfish, it’s self-preservation. The bottom line is that you can take out a loan to pay off your car, but you cannot take out a loan to support you through your retirement. Continuing to support family members only puts your future in jeopardy.
It might be a difficult call to make, but it’s imperative that you encourage family members to begin supporting themselves so you can have the comfortable retirement that you deserve.
3. Failing To Plan for Medical or Assisted Living Care
As you reach your retirement years, a slew of health conditions might begin to crop up. This is a natural part of aging. Or, you might get lucky and be perfectly happy and healthy throughout your golden years.
Either way, it’s crucial that you make allowance for the cost of healthcare. You never know when you might need the help of an assisted living home. Whether it’s for you or a spouse, medical bills can cripple you and eat up your savings if you don’t make an allowance for it.
Ensure you have adequate medical cover or a medical savings that can cover unexpected costs.
4. Prematurely Cashing In on Social Security Benefits
One of the most common mistakes that many seniors make is cashing on social security benefits before the age of 70. If you do, you can actually draw up to 32 percent less on your benefits.
Yes, you’re legible to begin drawing your social security benefits from the age of 62. But there’s no need to jump the gun just because it’s available or you’re afraid the system will run out of money — it won’t. Instead, it’s a good idea to try to hold off for a few years and live off your nest egg until you reach your 70’s so you can cash in on delayed retirement credits.
Avoid These Senior Money Mistakes and More
These are just a few of the most common and crippling senior money mistakes you want to avoid as you reach your retirement years. It goes without saying that the earlier you begin saving for your golden years, the more you can kick back and truly enjoy this time in your life.
Want to learn more about managing your finances or planning for retirement? Check out the rest of this site.
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