At Kennedy Wealth Management, LLC, we’ve seen just about every situation you can imagine when it comes to good and bad retirement income planning. As financial experts, we’ve helped countless people in the Calabasas area to make smart retirement planning decisions, securing a future where they can kick back, relax, and enjoy the rest of their days in peace.
At least, that’s how it should be. Unfortunately, even a rock-solid retirement income plan isn’t impervious to the damages of negligence and carelessness. There are several mistakes you can make in post-retirement that can sabotage even the most well-built plan.
Take it from us — as financial experts who have devoted our lives to knowing the intricate complexities of retirement planning, there’s nothing that’s sadder than seeing would-be-happy retirees squandering away their savings. If you want to enjoy a long and happy retirement, avoid these post-retirement mistakes.
Retiring Too Early
Some people have saved such an impressive nest egg that they don’t fathom how they could ever end up spending the ridiculous amount of money in their bank accounts. Sometimes, this leads to an early retirement, where people assume they’re ahead of the game.
This is bad for a few reasons. First, you’re extending your retirement length, requiring you to stretch your money thinner than intended. Second, you can usually reap more in retirement benefits when you wait for a little bit instead of retiring as soon as possible. You could make as much as 25% more each month in benefits if you wait until you’re 66, and that number can shoot up to 80% if you wait until 70.
Going on a Post-Retirement Spending Spree
This is by far the easiest and most common post-retirement mistake to fall into, and it ruins the plans of far too many people who have worked hard their entire lives. We understand how you must be feeling to finally retire — it’s freedom in a way you’ve never experienced. You’re finally free to enjoy the rewards that you’ve worked towards your entire life, without being beholden to a job, a school, or any other number of life responsibilities that you’ve had to deal with in the past.
It’s very common for fresh retirees, in celebration of this new stage of life, to let loose a little bit and go on a spending spree. This can manifest itself in different forms, such as vacation, home refurbishing, or doting upon children and grandchildren.
The problem is, in far too many cases, it’s not a temporary thing. The “post-retirement spending spree” goes on, and on, and on, until the retiree realizes far too late that they’ve been horribly mismanaging their money.
We don’t want you to ever feel that crushing, deflating feeling of realizing that you’ve squandered years’ worth of your retirement away. To avoid this and receive expert consultation on how you can effectively save and manage your money, contact our professional retirement income planners at Kennedy Wealth Management!
Not Thinking Enough About Your Move
It’s fairly common practice for fresh retirees to move. There are many reasons for this, such as moving to greener pastures, downsizing to a house that no longer needs to accommodate a full family, or saving money. The reality is that, while this plan is solid in theory, it often backfires when it’s poorly planned. Here are a few factors that a lot of new retirees don’t consider when they move:
- Higher property taxes or living expenses: It only seems logical that a much smaller house would cost you less money in the long run, but a lot of people don’t consider the extra amounts of money they will be paying in taxes or living expenses. Travel distances can be an issue too; if you move from a city to a remote area, you’ll be driving much more. And have you considered how much you might have to spend to make routine visits to your family from your new location?
- Death of a spouse: This is one that nobody thinks about, but as you age into your twilight years, you can’t afford to not consider a future where you or your spouse could very well reach the end of the line. One common situation is a couple moving out to an idyllic, remote home, only for one of them to pass away, leaving the other in loneliness and solitude. This is often fixed by moving yet again, which doesn’t do any favors for your retirement income.
Not Planning for Medical Expenses or Assisted Living
It’s not fun for anyone to say this, but at a certain point, no matter how healthy you’ve been your whole life, all bets are off when it comes to your longevity. Every last one of us will eventually reach that point, and you need to be prepared if your body succumbs to major health problems in old age, unexpected or otherwise.
One destroyer of retirement plans is grossly underestimating the amount of money that’s eaten up by healthcare. Even if you don’t have any health problems with you’re in your 60s, who’s to say how you’ll fare in your 70s? What about your 80s?
The more extreme version of this is assisted living, which is more expensive in a lot of instances than living on your own. Some people conclude that they’ll never have a need for assisted living. They figure things won’t get that bad, or their spouse will take care of them, or nearby family members.
The truth is, there’s no way to guarantee any of that with certainty, and it’s better to be safe than sorry. If you contact our team of retirement income planners at Kennedy Wealth Management, we’ll help you understand how much money you should be setting aside for medical.
Falling for Scams
This is one of the most tragic items on this list, because decades of hard work can be undone in a single moment, all due to a simple lie. Unfortunately, the elderly are a prime target for online scams, and while most are savvy enough to recognize a wolf in sheep’s clothing, not everyone is able to see what’s happening until it’s too late.
Unfortunately, some scam artists are adept at their craft, and even young tech-savvy adults fall into their clutches from time to time.
When it comes to scammers, whether they’re contacting you on the phone or reaching out to you online, you can often discover the truth by doing an online search. Never give away financial info to dubious entities, and be on the lookout for scammers who create fake versions of Amazon or PayPal.
Call a Retirement Income Planner Today
Many of these mistakes can be avoided if you have a well-conceived plan that covers the bases of your major life choices in post-retirement while leaving enough money to cover for unexpected setbacks and emergencies. Even if you’ve already created one in the past, it’s worth checking back on it due to constantly changing factors such as inflation.
Truly, one of the best measures you can take for a good retirement is creating an airtight income plan. At Kennedy Wealth Management, we’ve been helping the people of the Calabasas area for years. Contact us today!