If you want to retire without any regrets, take a careful look at these list of retirement mistakes and try your best not to commit them yourself.
Not saving enough
This is definitely on the top of any retirement regret list. People tend to spend so much and save so little even as their salaries go up. Save your money while you’re in your peak earning years. If you have a savings account, don’t think of it as an endless reservoir of cash. Think of the money you could accumulate if you just leave your savings intact.
One of the reasons people tend to lose focus on saving is because they borrow too much either from themselves or their banks or some other loaning institution. They live off their credit cards or use their home equity to take a grand vacation or buy a car. If you can’t afford to pay for your credit cards at the end of the month, then it’s better to do away with them. Resist the urge to withdraw or borrow unless its for emergency reasons.
Says Tash Elwyn, president of Raymond James & Associates, lavish living is common among business executives and business owners. Used to a life of extravagance with business trips in 5-star hotels, they have a hard time adjusting to “real life” when retirement comes. Retirement is not all peace and calm and relaxation. You need to plan your financial resources and maybe even change your standards and expectations a bit.
Not planning for emergencies
One of the key mistakes people make is failing to prepare for emergencies and other catatrophic events. This could be a debilitating illness, the loss of a job of an adult child who needs help, or the death of a loved one. Planning your retirement should also include planning for possible worst-case scenarios in your life.
Lack of a financial plan
The lack of proper financial planning is one of the top regrets of many people. This could include an investment plan and a tax plan. For instance, you can consider moving to a more tax-friendly state, city, country as part of a tax-reduction strategy when you retire. There are local taxes, federal taxes, and property taxes to think about. One of the biggest issues retired people have is paying too many taxes during their retirement years.
Retiring too early
Some people jump at the chance of an early retirement. This translates to less time to earn and save and also a longer period of retirement where your income is not at its peak.
Not investing in health insurance
When you’re young and healthy, it’s easy to forget that you have to plan for good health care. You might get surprised to know how much good medical care costs. Don’t rely on the government to take care of you when you’re old and sick and grey, especially since there are might be some huge expenses they won’t cover. Consider investing in a long-term health insurance while you’re healthy.