Retirement is the longest holiday that most seniors and retirees are looking forward to during their lifetime. It is time to reap the fruits of their hard work and labor. However, this is not usually the case for most seniors. Why do many seniors end up penniless during retirement? Why do many seniors remain dependent on social institutions?
In this article, we will discuss thoroughly the most common financial mistakes seniors make. In addition, we will also give practical tips on how to avoid these mistakes so seniors can enjoy a happy retirement.
Common Financial Mistakes
These are among the most common financial mistakes that people belonging to the age group of the 60s, 70s, 80s and up to make that pose a risk to their retirement and estate.
Refusing to seek expert help
Although we can safely assume that people in the “seniors” generation are wiser through the years, still, many seniors fail in wisdom to seek expert help and advice when it comes to handling their money. Most seniors refuse to ask for trusted advice from reliable persons because they either have no one else to turn to but their family members or sadly, their caretakers.
Many people welcome seniority years only to discover that the fruits of their toil have been relinquished to another, mismanaged, or even sadly stolen. These unfortunate events can be prevented.
A piece of practical advice to resolve this common mistake is that as young as you are now, make sure to seek expert advice about your money, investments, and properties with financial planners. Seek expert help of your trusted accountant on how to save on taxes. Consult an attorney to determine a legal and cost-efficient way to manage and dispose of your properties in the later years to come.
Too much fear investing
Another common financial mistake of most seniors is being succumbed to too much fear in investing that they tend to outlive their retirement money. If the goal is to have enough retirement money when you reach the 60s, then the focus of your investment strategy must be to get as many returns as possible during your earning years. Most seniors focus too much on avoiding loss of money that they do not remember the risks involved like inflation, credit, and unplanned major financial outflows.
How much retirement money is enough? This question requires careful planning with a trusted financial planner to answer. But basically, if you expect to live long, then you must plan long. Strategically invest your money, so it can outlive you. In this way, you can enjoy as much comfort in your retirement years.
Forgetting estate planning
This is one nightmare that seniors must never experience. What a horrible experience it will be when all the fruits of your labor during your earning years are not smoothly passed on to your family’s next generation.
Most seniors think that creating an estate plan is unnecessary since their families can easily inherit what they will leave. But that is not the reality. When seniors die, some of their assets may be tied up, bank accounts may be frozen, and estate proceeds may be exhausted to pay taxes and liabilities when not planned well.
A strategy to avoid this is to draft a last will with your attorney, so you can properly designate your beneficiaries.
According to statistics, 1 out of 3 American seniors eventually returns to the labor workforce even after retirement. This is because the majority of them needed more income to finance themselves. Do not be among them. Plan and prepare early and avoid these financial mistakes for your own benefit.