Using the value of one’s IRAs, 401k, 403b, Social Security payments, and other financial assets wisely during your retirement is critical to having a secure and comfortable retirement. And because we’re now living longer and healthier lives, one can expect to spend more time in retirement than your parents or grandparents did. Achieving the American Dream of a secure and comfortable retirement is easier when you plan.
Here are some of the most common retirement planning mistakes we see:
- Not having a realistic assessment of your financial resources. Many older workers have not calculated what they need to have budgeted to cover their ongoing retirement expenses.
- Retiring before you have sufficient financial resources. This is partially due to not preparing an analysis of what retirement income you actually need.
- Starting pension benefits and/or Social Security benefits too early.
- Drawing down one’s IRAs and 401(k) retirement savings too rapidly.
- Making uninformed or poor choices of financial advisers and/or financial products. Choosing unwisely can seriously hurt how much money your retirement investments are able to earn.
- Tapping into your home equity too early through home equity loans or the use of reverse mortgages.
- Continuing to have an unhealthy lifestyle. Doing so increases the odds of your developing expensive, debilitating conditions, which costs you more money during your retirement.
- Not having an approach in place to deal with the cost of medical and long-term care expenses. You don’t want these expenses wiping out your retirement nest egg.
- Keeping debt and spending your money on items that are unnecessary, unrealistic, or unaffordable. You don’t want to run out of money before you run out of breath.
- Lastly, but still very important: not having a good idea of what you want to do with your time and energy during your retirement years.
What Do You Need to Know About IRAs and Retirement Planning?
Both traditional and Roth IRAs have income limits and contribution limits, so your lawyer can explain the rules. If you are self-employed or own a business, your attorney can also help you to determine if a Simple or SEP IRA could be the best choice for you.
*All financial planning and advisory services are provided through Quraishi Wealth Management, LLC.