Retiring on a Middle-Class Income? Don’t Make These 7 Mistakes, Experts Say
Underestimating Healthcare Costs
Healthcare expenses can rise significantly in retirement. Failing to account for premiums, out-of-pocket costs, and long-term care can strain your savings
Not Maximizing Social Security Benefits
Claiming Social Security too early can reduce your monthly benefit. To maximize your payments, delay claiming until your full retirement age or later, depending on your financial situation.
– Overspending in the Early Years of Retirement
Spending too much early in retirement can deplete your savings quickly. Develop a realistic budget that balances your desired lifestyle with long-term sustainability.
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Ignoring Inflation
Inflation erodes purchasing power over time. When planning for retirement, consider the impact of rising costs on your savings
Failing to Diversify Investments
Relying too heavily on a single type of investment, like stocks or bonds, can increase risk. Diversify your portfolio to balance growth and security
Not Planning for Taxes
Taxes can significantly impact your retirement income, especially when withdrawing from tax-deferred accounts like 401(k)s and IRAs.
Not Having a Withdrawal Strategy
Without a clear strategy for withdrawing funds, you may run out of money too soon. Use the 4% rule or consult a financial planner to create a withdrawal plan that ensures your savings last throughout retirement.
Neglecting Estate Planning
Failing to have a will, trust, or other estate planning documents can lead to complications for your heirs.