5 Major Mistakes People Make Before Retirement

April 19, 2016

A good retirement draws on a lifetime of saving and work. But, despite its huge importance, many people slip up in the years just before this milestone. Some of these mistakes are the result of not understanding retirement, while others are conscious decisions that simply have a greater impact than estimated. Here are five of the biggest mistakes people make as they approach retirement.

  1. Not Preparing A Budget
    Do not wait until retirement to make a detailed budget. Budgets built on “frugal” spending or optimistic estimations can be broken by relatively small lifestyle changes. Create your retirement budget years in advance and tweak it annually to improve its accuracy.
  1. Decreasing Retirement Savings
    As retirement gets closer, those with accounts projected to meet retirement needs often cut their savings, thinking that their money won’t grow much before retirement. You should remember that this money will actually keep growing until the end of retirement, 20 or 30 years down the road.
  2. Taking Social Security Early
    Those who take social security benefits before their full retirement (benefits are available as early as age 62) will receive reduced payments. If you are still working, tax repercussions may make delaying benefits a smart option.
  1. Lending Too Much to Family
    For most, supporting family is of the utmost importance. But retirees need to remember that children and grandchildren have decades more to recover from losses and debt than they do. It may be hard to say “no,” but if handing out loans scuttles your retirement, it will end up costing everyone in the family more money.
  2. Relying on Home Values
    Many people rely on their home equity to fund a substantial portion of their retirement. While using home equity is not necessarily a bad thing, diversify your assets as much as possible to avoid home prices from dictating your entire retirement.

If we at Kemp Harvest Financial Group can help you in any way with regard to your financial planning needs, please feel free to contact us.

For more topics like this, check out our radio show “Retirement Plain and Simple” every Saturday morning at 8 on WNPV 1440 AM and like us on Facebook!

The information being provided is strictly as a courtesy.  When you link to any of the web sites provided herewith, you are leaving this site.  We make no representations as to the completeness or accuracy of the information provided at these sites.  Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site.  By clicking on the links above you will leave our web site and assume total responsibility and risk for your use of the sites to which you are linking.

This article was written by Advicent Solutions, an entity unrelated to LPL or Kemp Harvest Financial Group. The information contained in this article is not intended to be tax, investment, or legal advice, and it may not be relied on for the purpose of avoiding any tax penalties. LPL nor Kemp Harvest Financial Group provides tax or legal advice. You are encouraged to consult with your tax advisor or attorney regarding specific tax issues. © 2014 Advicent Solutions. All rights reserved.