Retirement Planning Mistakes

You’ve worked your entire life and now it’s time to kick back and ease into your retirement and Golden Years. Take a step back. You may have worked your entire life either in the same career or for the same company and now you’ve put in the years necessary to claim your pension and retire, but have you truly thought about what will mean to your financial lifestyle?

The experts at LifeFone work with seniors on a regular basis, helping them prepare for aging in place issues and providing personal medical devices to help that happen. LifeFone asks you to consider the following prior to your retirement so you can make certain your Golden Years are happy ones:

• Do you know what your financial life will be like following retirement? Will your pension allow you to continue with the standard of living to which you’re accustomed? Have you sat down with a financial planner and put together a plan for your retirement and the financial changes it could bring? A study published by the Employee Benefits Research Institute showed “only 42% of workers try to calculate a budget before retiring.” A budget is crucial to your financial success.
• Are you retiring at the “right time”? Close to 70% of all individuals say they plan to work at least part time once they retire, but the truth is, less than 25% of them actually do. Financial planners find that “for every year you continue to work between ages 62 and 70, you increase your chance for successful retirement by 10%.”
• Do you have any idea how long you will live? No one does, but underestimating how long you will live can put a damper on your lifestyle and may mean you go through your savings more quickly than you’d anticipated. Consider that studies show that men that reach the age of 65 (and decide to retire then) may live an additional 17 years beyond their retirement date. You need to plan your finances around your life expectancy and this may also mean working with your financial planner to make certain that you are not being too conservative with your investments and that you are planning for inflation into your retirement years.
• How much will you truly spend once you retire? Overspending, and under-budgeting, can lead to a situation in which you find yourself “running out of month” before you run out of money. Because you will have so much time on your hands, it is easy to fill that free time with trips (either to the store or a vacation) or to buy hobby items to fill your time. Having a budget in place, again is critical to long-term retirement success.
• What plans have you made for your health and your health care? Determining what you will pay for your healthcare insurance prior to retirement needs to be part of your budget process. You may also need to make plans for the eventuality that you may need long-term care in an assisted or other nursing facility and you need to find a way to make certain you have the funds to cover that. Budget now for the healthcare insurance you will need once you retire. Also consider adding a medical alert device to your budget. While you may be in great health, there are still many reasons why a medical alert in your home makes sense. As we age, our balance and vision can diminish and it’s a fact that 1 out of 3 people over the age of 65 falls at least once a year. The peace of mind and faster treatment in the event of an accident, fall or other emergency makes having a medical alert system a wise decision.
• Talk with your family and ask them for help or advice on getting your finances in order for your retirement years. This is also a good time to talk with them about healthcare proxies, powers of attorney and what your wishes are for aging in place and other issues that arise as we age.

Careful planning and consideration will help make your retirement years a little more golden.