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Retirement is a new chapter, but it comes with financial challenges. Many Baby Boomers might unknowingly harm their savings with certain missteps. Here are 19 pitfalls to watch out for, so you can enjoy your golden years without financial stress. Make sure to steer clear of these mistakes to safeguard your retirement savings.
Overlooking Tax Implications
Retirees often forget that withdrawals from certain retirement accounts can be taxable. Not planning for these taxes can lead to unexpected bills.
Not Staying Updated on Social Security Changes
Social Security rules and benefits can change. Not staying informed might mean missing out on benefits or making costly mistakes.
Not Having a Budget
Retirement still requires monitoring expenses. Lack of budgeting can lead to overspending that burns through savings.
Carrying Debt Into Retirement
Entering retirement with debts like mortgages, loans, and credit card balances eats up fixed income.
Helping Adult Children Financially Too Much
It’s good to help family, but not at the expense of your own retirement security. Set limits.
Large, high-maintenance homes can become financially draining. Consider downsizing.
Splurging on New Cars
Avoid large car loans for new vehicles. Drive paid-off, used cars to conserve funds.
Falling for Scams
Seniors are targets for financial scams. Stay vigilant and protect your money.
Ignoring Healthcare Costs
Failing to factor in deductibles, premiums, and prescriptions puts you at risk.
Not Having an Emergency Fund
A cash reserve prevents debt if large unexpected expenses come up.
Missing Required Minimum Distributions
Avoid penalties by taking RMDS from retirement accounts.
Withdrawing Too Much Too Soon
Withdrawing more than 4% annually could deplete your nest egg over time.
Not Factoring in Inflation
Inflation increments mean your money doesn’t go as far. Plan accordingly.
Spending Without a Partner’s Input
Joint retirement planning helps prevent one spouse from overspending.
Paying Too Much in Fees
Minimize investment management fees, which eat into returns.
Keeping the Wrong Insurance
Review all policies to ensure optimal coverage without overlaps.
Not Working Part-Time
Earn supplemental income with part-time work if your budget is tight.
Ignoring Long-Term Care Needs
Long term care is expensive. Have a plan to cover costs if needed.
Trying to Time the Market
Resist cashing out investments in response to normal dips. Stay the course.
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Michelle Harler is the founder of Guide2Free, a website dedicated to finding and sharing freebies, product testing opportunities, and other ways to save money. With over a decade of experience in the industry, her expertise in finding quality offers makes Guide2Free an invaluable resource for anyone looking to try new products and save money.