You’ve never retired before, and you’re probably going to do it only once. So it’s no wonder that many people make mistakes when they stop working and begin living off of their retirement benefits and savings. Luckily, you can learn from the mistakes of other retirees, and hopefully avoid making these blunders yourself!
Don’t let your credit rating slip. Your credit score is important to securing a mortgage or a low-interest car loan. But some retirees, who don’t anticipate buying another home or car, let their credit scores slip. Maybe they’re just forgetting to make payments on time, or are too busy enjoying their new lives. But your credit rating is still important, and helps you lock-in items like extra funds in an emergency, or a reasonable car insurance rate. Continue to protect your credit score, obtain a copy of your credit history once per year, and report any errors immediately.
Don’t take on too much debt. Sometimes retirees get a bit carried away with all of their freedom, and splurge on a new boat or a European vacation. There’s nothing wrong with rewarding yourself, but make sure you have a plan to pay for these luxuries. The last thing you want to do is saddle yourself with an uncomfortable financial burden.
Don’t count on your home’s equity. If you can cash out your home’s equity and use that money to help fund your retirement, that’s great! But remember not to count too heavily upon that equity when making your retirement plans. The real estate market fluctuates significantly, and sometimes bad luck prevents you from selling your home. It’s best to make sure your retirement income is stable without your home’s equity.
Don’t forget your medical expenses. Retirees are often shocked by the cost of health care in retirement. Remember to leave room in your budget for unexpected expenses, and count upon the cost of health care rising each year. Consider, also, supplemental Medicare plans or long-term care insurance to help you manage costs.
Don’t try to go it alone. Retirement decisions are some of the most important ones you will make in your life. Seek the advice of an expert, who can help guide you through the complicated maze of your retirement system. It’s better to be prepared, than to suffer the unforeseen consequences of a hasty decision. Call us for an appointment, and take advantage of our years of experience in retirement planning.
