Are you someone who is planning on retiring soon? Perhaps you have been meticulously planning for your silver years for decades. Or maybe you are someone who has only recently begun seriously thinking about funding for the imminent. You’ll constantly be wondering how prepared you really are and how much money you need for retirement. You may be fortunate enough to have a pension or good investments to fall back on. No matter which part of the journey you find yourself in, there are a few common retirement mistakes that many in your position have made. This article will inform you of these common pitfalls and how you can avoid them to secure your future.
Falling for Scams
You may have heard many a news report where people fall prey to scams. They have been cheated of hundreds of thousands of dollars and this can destroy their retirement. Never fall into the trap of something that seems too good to be true and promises you absurd amounts of money in a short time. Remember never to reveal your credit card and social security information to anyone without verification.
Postponing Saving Up
Many people believe that planning for retirement should start when they’re five years to a decade from their planned retirement. Nothing can be further from the truth. They say that the best time to plant a tree was 20 years ago – that rings true for saving up too. Start in your 20s and 30s! But don’t be demoralized if you haven’t; the second-best time to plant the tree is today! With aggressive saving habits, you are well on your way!
Claiming Social Security Too Soon
If you are relying on social security to finance your future immediately after you retire, you might want to hold on a bit longer. While it is true that 62 is the earliest you can start claiming, the amount of money that you get will be significantly less than if you were to start at 70. However, if you are struggling to pay your bills, you might want to forgo the higher payouts later for money now.
Tapping into Your 401(K)
You might think that your 401(k) is an excellent way for you to repay your loans and debts but it will only be useful in the short term. This is because you will not be eligible for employer contributions to your account during the period of repayment. Moreover, you will be taxed if you are below 59. This means that you will lose out on money that would have otherwise tided you over in your golden years.
Not Filling Up Your Free Time
The most common gripe that people have after retiring is that they miss their work and the structure that is provided. This doesn’t necessarily mean that you must keep working but a good idea may be to take part in fun community activities with those that share your passion and interests. Such hobbies will help you keep mentally and physically active throughout your retirement years.
