7 Mistakes New Retirees Need to Avoid
With 10,000 baby boomers turning 65 every day, the ranks of new retirees are growing faster than ever before. A recent U.S. News Money column details seven mistakes new retirees need to avoid to ensure a smooth transition:
Moving to a new location where you don't know anyone. While it may be tempting to move for better weather or to indulge a favorite hobby, moving to an entirely new location means you lose an important support system of family and friends.
Quitting your job before you are vested in your retirement plan. If you only have a few months left before you become fully vested in your employer's retirement plan, your retirement finances can benefit greatly.
Retiring before you get health insurance. You can qualify for Medicare at age 65; if you plan to retire before then, be sure you have an alternative health care plan lined up, especially if you have any health issues.
Not planning for long-term care. You may be healthy now, but chances are you will need long-term care at some point. You need to be sure to execute the appropriate health care directives to ensure you have someone to make health care decisions for you in case you become incapacitated, and make a plan for long-term care.
Taking Social Security benefits too early. Just because you can start your benefits at age 62 doesn't mean you should. Delaying them as long as possible means you will have a bigger benefits check to rely on later in retirement.
Forgetting to take RMDs. Beginning at age 70 ½, you must take the required minimum distributions (RMDs) from your IRAs and 401(k). Forgetting to do so can result in a penalty of up to 50 percent of the amount you should have withdrawn.
Spending too freely. Retirement is not the time to throw away your budget. While some expenses will go down once you retire, many find they spend more on travel and hobbies since they have more time to enjoy them. This can have a significantly negative impact on your retirement finances.
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 949-450-0042.