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As we age and near retirement, the financial decisions we make tend to have repercussions that can linger long into retirement. If you are even a decade or more away from retirement, committing any of these five money mistakes can come back to haunt you:

1. Too much debt. One of the biggest reasons people in their 40s and 50s get saddled with too much debt is because they decide to finance the college education of one or more of their children with no regard on the impact that decision will have on their own retirement. But consider this: if you take out a $25,000 loan at 7% for 10 years to pay for tuition, it will cost you $35,000 in total. If you instead invest those funds at 6%, it would grow to $45,000 over the same time period. If you just left it alone to grow for 20 years, it would be more than $144,000 – which could be of huge significance to you when you are in your 80s.

2. Deferring taxes. If you have a traditional IRA or 401(k), contributions to those plans are pre-tax, which means they are not taxed until you take money out. This makes your retirement savings prey to potential increases in the marginal tax rate. Consider switching to a Roth IRA or Roth 401(K) to take the tax hit now when you know what rates are instead of 30 years down the road when they could possibly take a much bigger bite out of your retirement savings.

3. Delaying long-term care planning. The best time to buy long-term care insurance is when you are relatively young and healthy, which is when premiums are the lowest since rates are based on your age and health. Health care costs are the single biggest threat to your retirement nest egg; failure to plan is failure to protect.

4. Delaying financial planning. None of us likes to think about growing old, but we would all like to live to a ripe old age! Hopefully you will, but you also need to plan today for that old age since science tells us that our brains age just as much (sometimes more) than our bodies. There may be a time when you will not be able to make good financial decisions, which is why it is critical you do the proper financial planning now to map out retirement strategies decades from now.

5. Delaying estate planning. You need an estate plan. Not just for what will happen to your personal possessions when you die, but what will happen to you while you are still alive. Putting powers of attorney, a living will and other estate planning instruments in place to protect you in case of incapacitation are critical to having good peace of mind in your retirement years.

The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0041.