Retirement: Avoid the biggest regrets with a plan

It is estimated that 6,000 Americans per day will turn 65 years old, the traditional retirement age. With that many people reaching retirement, financial advisors are beginning to hear a variety of retirement regrets, and learning what many Americans wish they had done differently.

Kyle Jones, Financial Planner at Wamhoff Financial Planning & Accounting Services, shares those top regrets and advice on how to avoid them with Elliot Weiler.

1. Retiring Too Soon

  • Reaching 65 isn’t an automatic pass to retire, and there are many things to consider:
  • Do you have a financial plan with goals, timelines, and budgets for how you’ll live in retirement?
  • Do you have a lot of debt you’ve incurred that you’ll need to pay off in retirement? Will you be able to do that?
  • Have you considered how you’ll access health insurance, and planned for what will happen if you or your spouse needs long term care?
  • How will your age (when you start taking benefits) affect how much Social Security you’ll be eligible for? Remember, once you begin taking benefits, there are no increases so decide wisely.

2. Not Considering a Budget or Lifestyle Adjustments Upon Retirement

  • It is very likely that your retirement income will not equal your pre-retirement income – and it doesn’t have to if you plan.
  • Create a realistic post-retirement budget that includes everything – fixed bills, vacations, and all expenditures, as well as an emergency fund to help with unexpected expenses.

3. Not Withdrawing from Your Retirement Accounts Wisely

  • Just because you’re retired and now have access to all that money you’ve been saving, don’t take out too much! Have a plan for how you’ll take disbursements and how your savings will last.
  • Take money from non-qualified accounts first, as they’ve already been taxed or partially taxed. This could include stocks, bonds, REITs or other investments not made with pre-tax dollars. This lessens your immediate tax burden.
  • Take money from qualified investments last. These are investments made with pre-tax dollars, such as your 401(k), pension or traditional IRAs.

4. Retiring Too Late

  • Consider what you’ll want to do in retirement, and assess your overall health. Will you be healthy enough to enjoy retirement when you get there?
  • Are there certain things you want to do with children and grandchildren when you retire? Will they be at the right age to do these things, or will they be too old for Disney World type of trips with grandma?

5. Not Planning to Continue Investing in Retirement

  • Just because you’ve gotten to retirement doesn’t mean your savings and investing days are over!
  • Look at your portfolio and make adjustments as needed.
  • Stay diversified, and consider what types of investments will help you keep up with the rate of inflation.