Four Mistakes to Avoid Near Retirement
If your retirement years are around the corner, pay attention to these tips
If you’ve carefully planned over the years and are all set to retire with a nest egg and grand visions of your retirement years, you might be thinking nothing can go wrong. Well, one wrong decision at such a critical point in time could derail all that you’ve worked so hard to achieve.
It may be tempting to start spending your savings as you’re on the verge of transition to retirement and there may be choices that seem legitimate. But it’s a good idea to slow down, think strategically and avoid making quick or emotional decisions. Here are a few key things to avoid as you’re heading into retirement:
- Spreading Out Your Accounts
Not consolidating accounts in one place makes having one solid, long-term retirement strategy difficult. This may cause some investments not be in tune with your goals and risk level. It’s also easier to spend more with multiple accounts, as the total amount you have isn’t clear. Having the ability to balance all investments together is an essential element of a successful financial roadmap. So park your money in one place and have a solid, customized long-term plan.
- Paying Off Your Kids Large Expenses
While being a parent certainly never ends, covering large expenses for children truly should have an end point. Making sure children are self sufficient and own their financial decisions ensures your retirement funds are going toward your retirement and not toward bailing them out. Giving in to requests for financial support for large expenses with your retirement income such as monthly rent or a car can largely affect those long-term plans you have for retirement.
- Failing To Have Specific Goals
It’s great to be saving for retirement, but without a specific goal in mind, you could fall short of what you need. It’s essential to estimate exactly how much money you will need each month to be comfortable for years, even decades. You’ll also need to estimate for the unknown such as many more years of life than you think, or inflation, and even illness. It’s up to you whether you want to live extravagantly or on a small budget in retirement, but lack of goals can send you off track
- Buying A More Expensive Home
Yes, retirement means finally spending your time and money how you want. It means taking advantage of the benefits from those working years. But it does not automatically mean you should splurge on your dream home. If you’re heading into retirement with a large mortgage or if you make a decision that puts you further into real estate debt, your freedom to do the things you envision could greatly be diminished. If you end up in a situation where you’re borrowing on your equity, you could eventually end up with no equity.
Your future isn’t something you want to compromise. One poor decision can have large consequences when it comes to your retirement years. Make sure you have a plan in place so you don’t veer off course. This will ensure that your retirement years give you the peace of mind and comfort you deserve.
Do you have questions about how to get financially prepared for retirement? Simply request a call from a Bayntree financial advisor today.
Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.