If you’re nearing retirement, there’s probably one thing on your mind–money. No matter how much you plan, your finances will always be the most significant retirement concern as you get closer and closer to starting this new chapter.
How can you get the peace of mind you deserve in retirement? You can stay on track to hit your retirement goals by avoiding the most common financial retirement mistakes.
Below are the three most common retirement mistakes to avoid to ensure you don’t negatively impact your retirement savings.
The market is volatile–it always has been. So, what do you do if you enter into retirement during a market decline? Don’t panic. There are ways to stretch your savings during a downturn that will prevent you from making any major retirement mistakes.
During a downturn in the market, one of the worst things you can do is sell more of your assets to meet your retirement income goal. Instead, before you retire, consider moving a portion of your assets into more stable investments that can more easily weather any downturns.
It’s recommended that retirees keep a portion of their retirement portfolio in cash or cash alternatives to fund any expenses during a down market. By delaying large purchases, diversifying your portfolio, and making safer investments, you can feel more comfortable weathering the storm even if you retire in a down market.
At age 62, Americans are eligible to start collecting Social Security. And while it’s your choice whether you collect immediately or delay payments, there are some things to consider. Taking benefits from Social Security before you reach the full retirement age (66 or 67) means settling for smaller payments over a longer period.
The best way to avoid this retirement mistake is to consider your current situation. If you’re in relatively good health, you’re married and you have savings, you can try to wait longer to start Social Security payments, which will lead to a larger monthly check.
People who collect Social Security starting at 62 years old end up receiving 30% less in monthly benefits than if they had waited until full retirement age. The goal is to preserve your portfolio and live off your Social Security payments for as long as you can once you hit retirement age.
Inflation is being felt in almost every aspect of life right now. While you might not realize it immediately, even low inflation levels can impact your purchasing power over time. As you near retirement, you need to account for inevitable inflation, or you’ll be making a major retirement mistake.
To avoid this major retirement concern, you need to ensure you are working with a qualified financial advisor who can help you create a personalized strategy for investments and retirement income. The goal is to maintain your purchasing power year after year. By allocating more money to stocks with a history of dividend growth or investing more in lower-risk options such as bonds, you can help make your money stretch further.
By meeting regularly with a trusted financial advisor, making lower-risk investments as you near retirement age, and delaying large purchases until you feel financially secure, you can confidently enter this new chapter. By avoiding the most common retirement mistakes, you can enjoy peace of mind that you’ll be financially secure for years to come.
One of the best things about retirement is that there’s no one way to live it. Upside understands that every retirement goal is different, and that’s why we’ve created flexible options to meet you where you are in your retirement. Let our Upside Managers help you enjoy senior living without the downsides. Learn more!