The largest generation of retirees in the United States’ history entered their retirement years in the previous decade, at the tail end of the Great Recession. Not only did Baby Boomers witness their retirement accounts shrink by more than half, but they also had to deal with anemic yields on CDs and bonds. Sadly, bonds are still struggling due to the spread of COVID-19. And coupled with a significant increase in life expectancy thanks to modern medicine, retirees continue to have their work cut out for them. Fortunately, it’s never too late to begin the retirement planning process. But retirees need to keep from making some avoidable mistakes that can sink their savings and investments. Here are some of the most common retirement plan mistakes to avoid during your financial planning.
While most people near retirement age have a sense of how much assets they have gathered, how much they will need to spend during retirement, and how long their money will last, most people fail to have those numbers compared to different market conditions. Suppose the economy continues to struggle or be susceptible to global pandemics. In that case, retirees need to challenge conventional wisdom regarding the expected annual rate of return, GDP growth, and inflation. Any one of these factors can easily offset a crafted retirement plan.
Underestimating Health Care Costs
Even for those on Medicare, healthcare costs erode spending power and economic security for most people planning to retire. Out-of-pocket expenses for people in retirement have continued to rise since the beginning of the century, and that doesn’t include the possibility of needing long-term health care insurance.
Healthcare costs continue to rise and pose one of the most serious risks to retirement security, so it’s crucial to understand how to plan for this major expense. To get the best advice, it’s important to work with local advisors, such as Orlando Retirement Solutions, to provide the best insights. Working with Orlando Retirement Solutions professionals gives retirees the best perspective and direction in the market.
Retiring Too Soon
Working even a few years beyond what a retiree originally planned for gives them a surprisingly large bonus in savings. Even though Social Security defines the retirement age as 66, about half of all Americans don’t wait that long. Retirees can avoid the early filing benefit reductions imposed by Social Security by working until their full retirement age while at the same time contributing to their retirement savings plan. Every additional year of working income is a year in which they’re not supporting themselves by drawing down balances of retirement savings.
It’s never too late to start planning for retirement. If you find the task of planning your financial life for the next thirty years too difficult, it might be time to lean on Orlando retirement solutions professionals to get a better outlook.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.