Pitfall #9: Moving Far Away from Family

Series: 9 Mistakes to Avoid in Retirement Planning

When you’re not yet retired and planning for the future, it seems wise to move to a low-tax state where the cost of living is low. BUT this may not be the best emotional or financial choice after all. Moving far from family means more money spent on travel. Greater distance can make you feel far, disconnected, even estranged from close family and friends whose relationships mean so much in our golden years.

There’s a lot to weigh, but considering all the pieces is important to avoiding unforeseen pitfalls that can impact your joy in retirement.

Pitfall #8: Doing Finances, Yourself

Series: 9 Mistakes to Avoid in Retirement Planning

Many of us think we’re good financial planners because we’ve had some success with our investments. However, that’s a potentially costly assumption. Financial planning is complex and complicated. By seeking the advice of experts who have dealt with a wide variety of situations, we get a plethora of experience and expertise. Trying to go it alone,  may translate into lost opportunities to earn and save more.

If you’re looking for a seasoned Certified Financial Planner (TM) practitioner, then drop us a line for a free consult. Put our passion and skill to work for your personal bottom line.

9 Mistakes to Avoid in Retirement Planning

Retirement can be a season of fulfillment, fun, and joy. Isn’t that what we all want– a wonderful, worry-free retirement with enough money to achieve our goals, hopes and dreams for this new season? To make this a reality, good planning is essential. (When it comes to retirement, failing to plan really does mean planning to fail.)

We’ve worked with a lot of folks to plan for their retirement, and in our experience, we’ve noticed several BIG MISTAKES that can cause unnecessary pain and struggle in the long-run. Here is our list of the top 9 mistakes you should avoid as you plan for a full and flourishing retirement.

Pitfall #1: Not Downsizing or Paying Off Your Mortgage

Pitfall #2: Ignoring the Risk of Long-Term Care

Pitfall #3: Not Understanding How Your Portfolio Works

Pitfall #4: Too Much or Too Little Risk

Pitfall #5: Not Having Legal Documents in Order

Pitfall #6: Not Having Beneficiaries on an Investment Account

Pitfall #7: Transferring a Home/Property to a Child Before Death

Pitfall #8: Doing Finances, Yourself

Pitfall #9: Moving Far Away from Family

Financial planning doesn’t happen by accident.  It’s a lot of work. It’s a lot of effort. It only happens with a dedicated process of working through financial objectives, goals and potential issues and coming up with solutions for all these objectives.

It is our privilege to help people put their money to work for their life’s hopes, goals and dreams. Feel free to contact us for a complimentary consult, so we can discuss Bringing Your Money to Life ™ .

Pitfall #6: Not Having Beneficiaries on an Investment Account

Series: 9 Mistakes to Avoid in Retirement Planning

We can pass on assets to others in a few ways when we die. First, they can be jointly owned with the surviving owner takes possession of the assets. Otherwise, it is done through naming a beneficiary.

If we don’t have joint ownership or name a beneficiary, then assets pass down through the stipulations in our will which can get messy. Don’t forget to designate beneficiaries in your will, otherwise your wishes may not be carried out.

Pitfall #5: Not Having Legal Documents in Order

Series: 9 Mistakes to Avoid in Retirement Planning

Planning for retirement means preparing for events we might rather ignore. Who wants to think about dying and whom to leave what to when we go? Who wants to talk about a scenario where we can’t care for ourselves and what happens then, who will take care of us? These difficult topis are precisely why wills, living revocable trusts, and other legal documents are crucial.

If we don’t get these legal documents in place, that doesn’t mean those events aren’t going to happen. It only means if and when they do happen, there will not be a proper structure in place to handle those affairs as we would like them to be handled. It becomes a potential problem for those that we expect will handle things for us.

Pitfall #4: Too Much or Too Little Risk

Series: 9 Mistakes to Avoid in Retirement Planning

It’s normal practice to shift your money to lower-risk vehicles as you head nearer to retirement. You want to minimize risk if the market falls so you don’t lose a lot. The problem is that many view their portfolio as a whole, rather than parts.

Years of experience have taught us that it’s wise to divide your portfolio into timeframes for withdrawals or your objectives for their use. One part can meet needs in the short-term with more liquidity and less risk. Another segment is for meeting long-term needs with higher risk, allowing you to access important growth opportunities.

Pitfall #3: Not Understanding How Your Portfolio Works

Series: 9 Mistakes to Avoid in Retirement Planning

We’re mistaken if we believe being set for retirement is as simple as withdrawing a certain percentage of our 401(k) monthly. If we are not able to control our expenses or get the returns we want from our portfolio and limit our investment risks, that sum of money is going to reduce to the point that there will not be enough money in our 401(k) for us to maintain the standard of living for the rest of our lives.

What may have worked in your portfolio in your working years may not work when you’re retired. Your income will most likely not be the same, and you won’t have an extra financial cushion if you make errors or face bad results in the market.

Pitfall# 2: Ignoring the Risk of Long-Term Care

Series: 9 Mistakes to Avoid in Retirement Planning

Long-term care is the biggest financial risk we face in retirement. Not only can it be expensive, but care can also extend for a long period of time. Many of us ignore the possibility of long-term care because it’s something we don’t want to think about. We also underestimate the chance we might need it.

Sometimes we think, it’s no problem, someone will just care for me. My spouse will care for me or my children will help out. We don’t realize what a strain that could be on others to provide that care for us.

It’s vital to come up with realistic solutions in the event long-term care is needed. Closely examine your financial resources. Look into purchasing a financial product for your needs. Be prepared to be covered by a government Medicaid program.