Going into retirement not only requires meticulous planning, but also a clear plan. Not only should you be financially sound, but you should also have a clear idea of your lifestyle and spending patterns. Most people make these mistakes when going into retirement.
Underestimation of healthcare costs – this is one area that is commonly overlooked when ambling towards retirement. Long term healthcare must be accounted for. Ensure that you have some form of healthcare coverage otherwise your financial plan will be heavily affected. If you are not adequately covered, then it is important to invest in a long-term healthcare insurance plan right away.
Your life expectancy estimation and your spouse’s – when retiring, you are assuming that you have enough to live for as long as you live. You need to overestimate your life expectancy and that of your spouse’s.
Presumption of working longer – do not overestimate working long into your retirement. This can be one of the biggest mistakes to make. In the US, the average age of retirement is 62. However, the Employee Benefit Research Institute Retirement Confidence Survey of 2007 indicates that 28% of employees had to retire earlier than planned for varied reasons. These include layoffs, disability, family reasons. Therefore, when planning out your retirement, take this into account as well.
When planning your retirement, it is best that you work with a professional and have a detailed plan drawn up. Take into account every possible snag that you might encounter on your way. It is always best to be prepared than sorry.
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