Much is written about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Some classic financial missteps have been known to plague retirees, too.
Calling them “missteps” may be a bit harsh, as not all of them represent errors in judgment. Either way, becoming aware of these potential retirement pitfalls may help you to avoid falling into them in the future.
Managing Social Security.
Social Security benefits are structured to rise about 8 percent for every year you delay receiving them after your full retirement age. Is waiting a few years to apply for benefits an idea you might consider? Filing for your monthly benefits before you reach your full retirement age can mean comparatively smaller monthly payments.1
Managing medical costs.
One report estimates that the average couple retiring at age 65 can expect to need $315,000 to cover health care expenses during the course of their retirement, even with additional coverage such as Medicare Part D, Medigap, and dental insurance. Having a strategy can help you be better prepared for medical costs.2
Understanding longevity.
Actuaries at the Social Security Administration project that a 65-year-old man has a 34 percent chance and a 65-year-old woman has a 45 percent chance to live to age 90. The prospect of a 20- or 30-year retirement is not only reasonable, but it should be expected.3
Managing withdrawals.
You may have heard of the “4 percent rule,” a guideline stating that you should take out only about 4 percent of your retirement savings annually. Each person's situation is unique but having some guidelines can help you prepare.
Managing taxes.
Some people enter retirement with investments in both taxable and tax-advantaged accounts. Which accounts should you draw money from first? To answer the question, a qualified financial professional would need to review your financial situation so they can better understand your goals and risk tolerance.
Managing other costs, like college.
There is no "financial aid" program for retirement. There are no “retirement loans.” A financial professional can help you review your anticipated income and costs before you commit to a long-term strategy, and help you make a balanced decision between retirement and helping with the cost of college for your children or grandchildren.
Rich Ramsay may be reached at 651-429-3151 or rich@ramsaywealth.com.
Sources:
1. SSSA.gov, 2023
2. Fidelity.com, 2023
3. LongevityIllustrator.org, 2023
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your investment strategy for tax considerations.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.
Securities offered through JW Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through JW Cole Advisors, Inc. (JWCA). Ramsay Wealth Management and JWC/JWCA are unaffiliated entities.
News
- News
- Tax Deductions Gone in 2018
- Avoiding the Cybercrooks
- What Do You Have in Reserve for 2018?
- The Medical Expense Deduction in 2018
- The Backdoor Roth IRA
- How New Tax Laws Affect Small Businesses
- Watch for These Insurance Blind Spots
- Tax Changes Around the Home
- Why the U.S. Might Be Less Affected by a Trade War
- Debunking a Few Popular Retirement Myths
- Searching for Health Coverage in the Years Before Medicare
- Is Generation X Preparing Adequately for Retirement?
- A Retirement Fact Sheet
- When a Family Member Dies
- Section 199A Business Tax Deductions
- Certain Uncertainties in Retirement
- Retirement Now vs. Retirement Then
- The Chapters of Retirement
- Three Key Questions to Answer Before Taking Social Security
- Retiring Single
- Eight Mistakes That Can Upend Your Retirement
- Why Having a Financial Professional Matters
- Retirement Wellness
- Systematic Withdrawal Strategies
- Measuring the Value of a Financial Advisor
- Debunking Common Retirement Assumptions
- Tax Considerations for Retirees
- Key Provisions of the CARES Act
- A Stock Market Lesson to Remember
- Eldercare Choices in the COVID-19 Era
- Before You Claim Social Security
- A Checklist for When a Spouse or Parent Passes
- Why Medicare Should Be Part of Your Retirement Strategy
- Year-End Estate Strategies
- The Social Security Administration Announces 2021 COLA
- 2021 Limits for IRAs, 401(k)s and More
- Building a Healthy Financial Foundation
- Earnings Season Gets Underway
- Tax Efficiency in Retirement
- Paying for the Infrastructure Bill
- 2021 Retirement Confidence Survey
- A COLA with Your Social Security?
- Conducting Your Mid-Year Financial Checkup
- A 6.1% Bump in Social Security?
- 401(k) Millionaires
- The Social Security Administration Announces 2022 COLA
- Wise Decisions with Retirement in Mind
- Fed Chair Changes His Tune
- Outlook for 2022
- Retirement Preparation Mistakes
- Getting (Mentally) Ready to Retire
- Are You Retiring Within the Next 5 Years?
- The Retirement Reality Check
- Rehearsing for Retirement
- Creating a Retirement Strategy
- Required Minimum Distributions 101
- 5 Retirement Concerns Too Often Overlooked
- Should We Reconsider What “Retirement” Means?
- End-of-the-Year Money Moves
- New Retirement Contribution Limits for 2023
- Managing Probate When Setting Up Your Estate
- What Happens When There Are No Beneficiaries
- Couples Retiring on the Same Page
- 9 Facts About Social Security
- Eight Mistakes That Can Upend Your Retirement
- Healthcare Costs in Retirement
- Navigating Retirement Pitfalls
- Does Your Portfolio Fit Your Retirement Lifestyle?
- Helpful Retirement Strategies for Women
- Orchestrating Your Retirement Accounts
- Important Birthdays Over 50
- Social Security: Five Facts You Need to Know
- How Will Working Affect Social Security Benefits?
- Women and Wealth: A Pivot Towards Retirement
- Immediate vs. Deferred Annuities
- How Retirement Spending Changes with Time
- The A, B, C, & D of Medicare
- Understanding Money Market Funds
- Glossary
- White Papers
- Blog