Financial independence is a goal that many people have in life. Working for decades is hard enough, but many people end up making mistakes financially once they retire. Over time, the decisions that you make leading up to the point where you retire are essential to your success. A lot of people end up regretting spending too much money or investing too little once they get to retire. Here are some of the biggest mistakes that people make when they retire, and things that you can do to improve your chances of staying retired.
Investing Too Little
Perhaps the biggest retirement mistake is investing too little throughout your working life. There are a lot of people who want to retire on as little money as possible so they can quit the rat race. However, you need to make sure you have a sizable nest egg for when you decide to retire. There are a lot of people who struggle financially the rest of their life because they did not save enough. In addition, one market swing can wipe out a huge chunk of your portfolio because you did not plan carefully. Always make sure that you run through several financial scenarios before you decide to retire. This is one of the best ways to prevent financial issues later on in life.
When living on a fixed income, it is essential to control your expenses. One of the best ways to do this is through budgeting. A lot of people get a false sense of security with how large their financial portfolio is. However, you have to remember that this fund needs to last for the rest of your life. Making small changes in your financial planning can have major positive impacts on the amount of time this money will last. Always make sure that you are planning for the future in any way that you can financially.
Although investments in stocks and bonds are important, you health is even more important than that. A lot of people concentrate too much on their job and their career while they are working. Instead they should be looking for ways to improve their overall health and well-being. Over time, health issues can cost a lot of money if they go without being dealt with. Before you officially retire, you need to make sure you have a health screening to check for anything major. Your investments will not cover a major heart attack or other financial issue later in life. In fact, the number one worry of people who are about to retire is health-related expenses. All of these things can be greatly reduced if you simply start investing in your health today.
Overall, retirement is a goal for many people in life. There are a lot of people who want to retire and never have to think about money again again. If this is your plan, you need to be on a strict budgeting plan so that you do not eat into your principle. A lot of people wrongly assume that they will only live for ten or so years after they retire. However, many people end up living for two or three times that span. Over time, this is a major issue that you have to deal with in a variety of ways. Not only do you need to make sure you have the financial support to do this, but you need to have a plan for your health expenses as well.
We are here to answer any questions you have regarding your current plan or the retirement road ahead.
Eric and Jennifer Lahaie
JEHM Wealth & Retirement
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