When you’re nearing retirement, planning for financial security is often a top priority. You want to make sure that what you’ve saved and invested lasts the rest of your life, while still allowing you to enjoy the kind of lifestyle you’ve hoped for during your retirement years. This isn’t always easy to do, especially without help.
Alison Wall, Senior Living Consultant at TreVista Antioch, an assisted living and memory care community in Antioch, CA, says, “Unless we have a strong financial background, most of us don’t know the ins and outs of everything involved with planning financial for retirement. It’s easy to make mistakes in our assumptions and priorities when it comes to money. As seniors begin readying their finances for retirement, they should not only be diligent about common mistakes, but also keep an open mind about what’s best for securing their retirement lifestyle.”
Common Mistakes Seniors Make – And How to Avoid Them
According to sources such as Business Insider and Forbes, some of the top financial planning mistakes senior makes involve neglecting economic trends and behaviors that put their savings at risk. Most of us require the help of an expert to properly plan for the future, considering the complicated workings of economic inflation, taxes and dos and don’ts of various retirement savings plans. Additionally, with the help of a third party, we can adjust our perspective on how to spend what we have.
As you begin financial planning for your retirement, consider some of the common mistakes seniors make with their money:
- Assuming Your Lifespan – People are living longer than ever. In many cases, older adults that retire in their 60s could continue to live another 30 – even 40 – years. And because no one has a crystal ball, we shouldn’t assume or try to predict how long we’ll live. If you assume you’ll only live to 85 and plan around that number, you could be in a lot of trouble if you live past that. It would be safer to plan as if you’re living much longer to ensure you don’t outlive your retirement income.
- Neglecting Inflation – A common mistake seniors make when crunching numbers for their retirement is to neglect inflation. Without accounting for it, seniors find that their income doesn’t go as far as they thought. The costs of healthcare and long-term care are constantly on the rise, so financial planning needs to reflect that. Unless you have a deep understanding of economics and the current market, seeking the help of a financial planner is the best way to avoid this pitfall.
- Not Considering Taxes – As with inflation, many seniors fail to consider taxes or to calculate them correctly when making their retirement plans. Although many believe they should be paying fewer taxes during retirement, this isn’t necessarily true. Retirees may no longer have the same deductions or lack the knowledge of how their savings distributions will be taxed. Again, consulting a financial planner can ensure you plan accordingly to cover current and future tax expenses.
- Starting Social Security Too Early – The earliest someone can begin receiving Social Security benefits is at age 62. And many seniors start taking it at this point because it guarantees some secure income. However, taking Social Security at this age reduces your benefits about 25 percent. If you wait until full retirement age (66), you’ll receive full benefits. However, delaying your Social Security benefits even farther, until age 70, your benefits can increase by another 32 percent. Being aware of how Social Security works is key to taking full advantage of your benefits. If you can use other sources of income before taking from Social Security, you could see greater benefits later on.
- Not Having an Estate Plan – Seniors who fail to create an estate plan put their assets at risk. Securing your assets such as investments, savings, real estate and so on can protect them from being severely taxed after your death. If your estate is not legally secured, anything you hope to pass on to your spouse or your children will be much less. Meet with an estate planner to learn how best to protect your assets.
- Spending Too Much Early On – The freedom of retirement can be exuberating. You may be tempted to take long vacations, travel extensively or make large purchases for your newly acquired leisure. However, overspending at the beginning of your retirement can be dangerous, considering that what you have now greatly influences what you’ll have ten or twenty years from now. In order to keep from depleting important investment sources, create a budget that includes necessary expenses and discretionary spending. Start out your retirement with a responsible budget so that your savings last throughout your lifetime.
- Taking Advice from Friends – Even if your friend or family member has the ideal retirement setup, be wary of taking their advice on financial matters. The details of their situation are likely quite different than your own. What works for one retiree may not work for another. A good rule of thumb is to only act on the advice of a trusted, professional financial planner.
- Supporting Adult Children – Many seniors in their retirement hope to give financial gifts to their children or grandchildren. Others think that they should help out their adult children who may not be well off financially. Experts agree that such things should be done with great caution. Retirees only have so much money in their pool, and if they take out a large amount to give to an adult child, it’s gone for good, whereas an adult child can work to earn more money over their career. As hard as it may be, it might be necessary for retired parents to say no to helping their children financially.
- Being on a Different Page Than Your Spouse – Lastly, another common mistake seniors make is not agreeing on financial plans with their spouse. If one partner is trying to save while the other is spending with abandon, any financial plan they might have made is basically naught. Work together with your spouse to make financial planning decisions and stick to them. If you need help, consulting a third-party financial planner might be the best way to accomplish your goals.
Your Partner for the Future
Planning financially for your retirement can be overwhelming, but it doesn’t have to be with careful consideration and the help of trusted experts. If you’d like to learn more about planning for your future, reach out to the team at TreVista Antioch. We’d be happy to help you find local resources as well as discuss options for long-term care. Contact us today!
Making the everyday extraordinary.
Family-owned and operated, Agemark Senior Living is the new owner of TreVista Antioch. Known for creating warm, welcoming communities, vibrant lifestyles and engaging programming, Agemark has been one of the most premier and trusted senior living providers since 1987. As Agemark’s newest community, TreVista Antioch is located on 10 acres in a prime location close to shopping and local attractions, as well as the great outdoors. Our beautiful community features a personalized, resident-centric approach to care that provides support, all while helping residents live full, connected lives.
At TreVista Antioch, we provide assisted living and memory care set in a beautiful environment that not only meets our residents’ needs but makes them, as well as their families, feel more at home. Although our gorgeous community is a plus, we truly believe it’s our programming and caring, dedicated staff that makes TreVista home. With our family-oriented inspiration and resident-centric approach, our residents flourish and experience days full of joy and meaning. Our staff learns each resident’s likes and dislikes and their values and pasts, right down to the dreams they never thought they could accomplish, in order to customize their care and make their dreams a reality.
LifeCycles wellness programming encourages our residents to connect, engage and enjoy life, every day. Our LifeCycles programming is designed to focus on the four dimensions of wellness: physical, social, spiritual and intellectual. This is achieved through a wide range of daily activities and routines, from outings and excursions to local events and programming at the community. At TreVista Antioch, our residents have the tools and care they need to make each day fulfilling, engaging and vibrant. Contact us to learn more!
Call us at 925•329•6292 for more information or to schedule a personal visit today.
TreVista Antioch is part of the Agemark family of senior living communities.