Nobody intends to make financial mistakes when it comes to funding their retirement. Unfortunately, a lot of people who are retired or are approaching retirement age in New York simply haven't done the preparation that they need in order to make sure that they have enough security for the remainder of their lives.
Estate planning is a big component of a comprehensive wealth preservation strategy and is best handled by a professional. But many people don't think about how their plan for directing assets after their death needs to include a crucial step: preparing for what could be several decades of retirement. Health care costs, for example, can take up a giant bite of retirement savings that retirees don't always consider ahead of time.
Here are some potential pitfalls for retirees and those about to retire:
- Being too conservative financially. People want to preserve what they have, but with inflation the way it has been, simple savings instruments may not be enough to keep up.
- Delaying planning. The sooner a comprehensive estate plan can be in place and implemented, the better. With so many seniors experiencing cognitive impairment in their later years, professional guidance is essential.
- Being overly generous. The temptation to give to children and grandchildren may be great, but be prudent. They won't be retiring for a long time.
- Being overtaxed. Many people overlook easy-to-avoid mistakes such as not withdrawing from IRAs at the right time.
- Taking financial advice from unqualified people. Friends and family mean well, but unless they are financial professionals, their advice should be taken with a ton of salt.
- Not saving enough for health care. Supplemental insurance can help if personal savings and Medicare don't cover everything.
- Not planning to live a long time. As people live longer, retirements can last for 30 years or more, and medical science keeps making improvements.
Source: CBS News, " Groundhog Day: 7 mistakes retirees make repeatedly," Feb. 1, 2012