Reaching retirement is the final leg of a long race and like all races, if you don’t plan for the end, you’re more likely to collapse across the finish line than sprint into glory. In the world of sports, preparedness means pacing yourself and packing water; in the world of racing toward retirement, preparedness means planning ahead and anticipating pitfalls. With this in mind, we have prepared the following list of the top five retirement mistakes to avoid.
Five Common Retirement Pitfalls
1. Forgetting What It’s All For
Here, we should insert some joke about aging and forgetfulness, but lawyers aren’t known for their sense of humor. Instead, we’ll get straight to the point: no matter how much money you save, your retirement will only be as good as the goals you set. In order to craft a strong retirement plan, you need to first know what it’s all for. This means thinking about how you want to spend your time and what you would like to accomplish in your golden years. Only upon this basis can you be sure to build a retirement with which you’re truly happy.
2. Failing to Strategize
Dreaming up your ideal retirement is the fun part but making it happen means getting down to brass tacks. Without a strategy for how you will achieve your goals, chances are you won’t. The first step is designing a budget that takes both lifestyle and well-being into account. From there, you need a financial plan and a strategy to minimize taxes, maximize Social Security benefits, ensure access to healthcare coverage, and see to it that your estate plan is complete.
3. Missing Out on Tax-Deferred Savings
IRA and 401(k) contributions are a cornerstone of retirement savings, especially if your employer matches your contributions. Not only will building up such accounts reduce your tax bill but because both accumulate interest, you can grow a handsome nest egg by the time you finish working if you start early and contribute regularly.
4. Investing Recklessly
Accumulating sufficient savings to finance your retirement goals is essential and pursuing a growth-oriented investment strategy can help but as you age, you need to remember to re-calibrate your risk tolerance. After all, savings are nothing if not protected. If you fail to taper your retirement fund’s risk exposure later in life, you run the danger of losing needed funds and having no time to see them recover.
5. Overlooking Long-Term Care Needs
If caught off guard by the cost of long-term care, all of your careful financial planning can quickly crumble. With the average cost of nursing home care topping $8,000 per month in the US, most individuals will not be able to pay out of pocket without quickly spending down their life’s work. This is where long-term care insurance or Medicaid planning becomes crucial—both subjects best addressed with an experienced elder law attorney.
While the above are the top five retirement mistakes to avoid, they do not constitute an exhaustive list. The best way to ensure your retirement plan protects you from all unseen pitfalls is to work in consultation with an experienced attorney. After all, in having seen it all, they will be able to steer you around obstacles and make certain your goals are achieved. At the Deliberato Law Center, we take pride in working with your unique circumstances to design you a retirement that not only provides comfort but is distinctly yours.
Don’t get caught by the top five retirement mistakes covered in this article or by any others! Call our office at (216) 341-3413 or contact us via our website to get started on a worry-free retirement plan today.
Contact the Estate Planning Attorneys at Deliberato Law Center