Retirement Guidance: Five Behaviors to Consider Avoiding

Most people are easily and happily able to define what kind of lifestyle they wish to have in retirement.

Dreams of traveling to exotic locations and spending on items such as a cabin or boat sound great, but each of these desires carries a very real price tag. Everything you want to do in retirement must be planned for well in advance. Although, it is easy to make one wrong decision that veers from your plan and derails some of those desires.

Here are five behaviors to avoid if you want to retire smart and with enough savings to achieve all of those dreams.

Buying a timeshare.

It might sound like a fun idea that can save you money while allowing you to vacation responsibly, but a timeshare is actually an expensive choice. Most people do not use their timeshares as often as they think they will, and it is often not as convenient as originally believed. There is usually an up-front cost plus an annual maintenance fee that can even reach $3,000 in some cases. While you can sometimes sell an unused timeshare on the resale market, it is a better idea to put your money into a savings account and avoid the purchase all together.

Taking withdrawals from your 401k

Borrowing from your 401k reduces retirement savings and that withdrawn money can change your retirement timeline. The potential costs of such actions can actually be evaluated and predicted. For example, a 40-year-old employee who is planning to retire at age 65 and is on target, but then borrows 30 percent of the money in their 401k would potentially reduce their available retirement income by 15 percent, delaying retirement by five years, according to a Mass Mutual analysis. Your retirement account should only be accessed in a true emergency.

Not having an emergency savings

The Federal Reserve Board completed a study that indicated 40 percent of United States households do not have enough to cover an unexpected expense of $400 or more. People instead turn to credit cards or 401k loans, both of which are costly choices. Investing in a savings account each month ensures that you can address unexpected events and helps to avoid additional costs in the form of interest or penalties.

Assuming you won’t have health issues

During active working years and even through retirement, if you’re healthy there is likely little concern about failing health. After all, who wants to think through long-term illnesses or surgeries that aging can bring? Many people believe Medicare will come to the rescue in the event of a turn for the worse, but this form of insurance actually has significant deductibles and co-payments and does not even cover many health services that employer-based plans typically cover. Health conditions can arise out of nowhere and if you aren’t adequately prepared, it could cost you considerably.

Counting on Social Security benefits

Social Security really is a wild card. It is not known how much you will receive if anything by the time you’re of age, given the possibility for change between now and retirement. You should plan for any Social Security benefits to be the icing on your retirement cake, meaning assume that you won’t receive that income and if you do, you’ll be way ahead. Also, no one knows exactly how long they will live, but if you do reach the age where Social Security benefits are possible, defer your benefits until full retirement age to maximize your benefits.

Finally, if your plan includes assuming you can work until you don’t want to anymore as a safety net, it may be time to reconsider your strategy to have less risk. There will come a time when you either do not want to work anymore or experience a life event that prevents you from working unexpectedly. You must have a plan in place for your retirement to cover unexpected events and to ensure that you spend your years however you choose.

If you have questions about your retirement plan or are in need of one, schedule an appointment on our online calendar by selecting the date and time that is most convenient for you! You can also always reach us at

Bayntree Wealth Advisors 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.

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