Sometimes even the wisdom that comes with age is not enough to keep retirees and those looking forward to retirement from making potentially costly mistakes in retirement planning. Consider getting some help: working with a Fee-Only financial planner means you have an expert looking out for you to help you make informed decisions (and not to get a commission for recommending certain products.
Yahoo! Finance listed “5 of the Biggest Money Mistakes Retirees Make” and if you or someone you know has done any of these things or is considering them, seek the advice of a financial planner. Here are some things to consider:
Taking Social Security Benefits Too Early
In some instances, a person doesn’t have much choice but you should know that the later you wait, the more you will get each month. A person can choose to receive benefits at 62 but this doesn’t mean you must do this. Sound financial planning can make it possible to hold off on receiving Social Security.
Underestimating Healthcare Costs
Some retirees that felt certain they could rely on Medicare and didn’t investigate the ins and outs of the program are surprised when it doesn’t meet all of their needs. The article cites studies that estimate a person who is 65 in 2013 may need about $220,000 for healthcare for the rest of his or her life.
You may even want to consider long-term care insurance.
Eliminating Mortgage Debt
It feels good to pay off a mortgage and own your home outright and many retirees and people close to retirement make this move because it seems like common sense. What they don’t realize is that they may be setting themselves up to be “house-rich and cash-poor.” Before paying off your mortgage, consult with a Fee-Only financial planner to explore your options and figure out if this is a move that will be beneficial or detrimental.