Retirement is a key chapter in the lives of many and can open up opportunities for leisure, travel, and quality experiences. However, before a person retires, there are preparations and certain actions that should be taken. Retirement planning is a crucial component to achieving the retirement lifestyle you desire.
While you have likely thought about your retirement throughout your years in the workforce, you may be at a point where you want to take a more hands-on approach to the situation.
Senior Solutions Management Group, with senior care communities located in Tennessee, Georgia, South Carolina, and Louisiana, is highlighting some common retirement planning mistakes that you should be aware of and aim to avoid.
Not Having a Retirement Plan
While we may not think about our retirement in our early 20’s, the closer we get to retirement age, the more a person should prepare. Unfortunately, according to recent studies, not everyone is ready for retirement. One report from Northwestern Mutual shows that 15% of Americans have nothing saved towards their retirement.
“Younger generations who have had limited time to save aren’t skewing the numbers either. For both Gen X-ers (defined here as ages 39 to 54) and baby boomers (defined as ages 55 to 73), 14% of survey respondents in each group say they have nothing saved for retirement (CNBC.com).” Not having a retirement plan is very common, and it is the first mistake you should avoid.
If you still have ample time before you hit your goal retirement age, you can correct this mistake by creating a savings account and/or seeking employment benefits. Some companies match 401k contributions to your retirement account. If you find yourself closer to your retirement with no plan, consider speaking to a financial advisor to go over all your assets, savings, and finances to structure a realistic retirement plan.
Not Updating Your Plan
Retirement planning isn’t a set it and forget it scenario. You should revisit your plan and adjust accordingly over the years. As technology advances, new companies, new stocks, and new ways of investing are developed, they can outdate your current goal or plan.
Be sure to research how your retirement planning is being affected every few years. If your retirement plan is not updated, it may become stagnant, and your investments will not grow.
Retiring Too Early
While some people aim to retire before the recommended retirement age, they will not receive the majority of their benefits. Retirement benefits are released based on your age, the longer you wait to retire, the more you can collect.
The Social Security Administration says that those born between the years of 1943 and 1954 will only receive their full benefits if they retire at the age of 66 years old. You can retire early and begin collecting your retirement benefits at the age of 62, but your benefits are reduced anywhere from 20% to 30%.
This reduction in benefits may not impact your retirement plan, which is why it’s important to plan accordingly for yourself and ensure you are maximizing your retirement benefits.
Miscalculating Your Care Needs
Another retirement planning mistake that some make is miscalculating or underestimating care needs and hidden fees. It is estimated that a 65-year-old couple will need nearly $390,000 to cover healthcare expenses; this includes Medicare plans B & D.
While no one wants to think of additional medical expenses, they are an essential factor in your retirement planning. Beyond medical care, other unexpected costs may arise, like maintenance or remodeling on your home. The average homeowner spends an estimated 1% to 4% of what their house is worth on maintenance every year.
Considering a senior living community can be the answer to both problems. Senior Solutions Management Group’s maintenance-free communities, located throughout Tennessee, Georgia, South Carolina, and Louisiana, offer a variety of care levels from independent living to memory support for those dealing with Alzheimer’s and other forms of dementia. Many of our communities also provide continuing care, so, should your health and care needs change, you can reside in the same community while receiving the necessary level of care and attention.
Contact Senior Solutions Management Group to learn how our communities can improve your retirement lifestyle!