You can easily recover from money mistakes when you are young. The case is different in your 60s as poor financial decisions can prove costly. Even though financial planning is important at all stages of life, it is more vital as you near retirement. We have listed some of these financial mistakes below to help you to avoid them.
Not Having a Long-Term Care Plan
First, you need to understand that Medicare doesn’t cover long-term care. This simply means that you have to make plans for it yourself. Even if you think you might not need it, it will help to have some plans for your long-term care when the needs arise.
According to the U.S Department of Health and Human Services, seven out of 10 people turning 65 need a type of long-term care during their lifetime. It will be a terrible mistake to leave long-term care out of your retirement plan. The cost of long-term care is extremely high, which is why you need to plan for it to avoid financial struggles when the time comes.
Overspending on Adult Family Members
If you have extra cash, it’s best to save it rather than give it away. Overspending or being the family members’ source for extra funds will restrict you from doing that. Refrain from giving handouts except if it is an urgent financial situation in special circumstances. Every little penny you give out accounts to what drains your retirement savings.
Leaving All Financial Matters to Your Partner
Instead of leaving your partner to deal with all the finances, you should deal with them together. The truth is, one of you will pass on before the other and you don’t want to be left in a financial mess when that happens.
Collecting Social Security Benefits Too Early
One of the most grievous financial mistakes you can make after retirement is to withdraw your social security benefits. You don’t have to take the income early just because it is available. You will even receive more each month if you are patient enough to wait until your full retirement age.
You should budget your social security benefits as a supplement for your other means of income. The benefits will most likely not be enough to cover housing costs and that can affect the quality of life. Calculate how much you can earn from waiting instead of withdrawing the benefits as soon as possible.
Avoid Investing Aggressively
Investing in stock is good, but ensure that you have enough cash to sustain you until you start getting profits from your investment. This means that you should avoid investing aggressively, as you may not get enough time to recover from losses when the stock market value drops. After turning 60, shift your investment plans and focus on less volatile income fixed assets. Also, learn to balance your investment portfolio to match your stocks, bonds, and cash.
Take control of your finances and plan toward a happy and financially stable retirement. At Morada Fort Smith, we provide a comfortable retirement community where you can move into independent living at an affordable cost.
