What Is the Biggest Retirement Planning Mistake?
Reading Time: 2 MinutesLast Updated: April 20, 2017
That’s easy to answer: Not having a plan!
Building a financially secure retirement doesn’t happen by itself. You need to make a commitment to smart financial decisions long before retirement — starting in your 20s would have been ideal — and then keep carrying through on your retirement plan.
Here are some other big retirement-planning mistakes I want you to avoid:
- Not maximizing your Social Security retirement benefit. I strongly encourage you to wait until your Full Retirement Age (FRA) to start receiving your Social Security benefit. That’s between age 66 and age 67 depending on the year you were born. The payout will be 25 to 30 percent higher than what you are eligible for if you start at age 62, which is the earliest you can claim. And ideally, if you are in good health and there is longevity in your family, I encourage you to devise a financial plan that allows you (or your spouse — whomever is the highest earner) to delay starting until age 70. Every year past your FRA through age 70 entitles you to a payout that will grow by a guaranteed eight percent. You can’t get eight percent guaranteed investing these days!
- Not saving on your own. Yes, Social Security will be an important source of income in retirement. But chances are it won’t cover all of your basic needs, to say nothing of a few wants. You don’t have a workplace retirement plan? Then, I want you to save up in a Roth IRA. If you are over 50 this year you can contribute $6,500. That’s $125 a week. Please take a hard look at all your spending and see if you can free up more money to build a strong retirement fund.
- Not accounting for medical costs in retirement. It’s so important to understand that Medicare doesn’t cover everything, and not many people have retirement health benefits from an old employer. On average, retirees end up needing to cover about 30 percent of their health care costs.
- Not Planning for a Very Long Life. There is a 50 percent chance a 65-year-old woman today will still be alive at age 88. And for a 65-year-old male there is a 50 percent chance he will still be alive at age 85. (Check out this free online life expectancy calculator.) Given the possibility of living a long time, you need to make sure your savings will last longer than you! One smart way to stretch your savings is to keep working in your 60s, even if it is part-time work. Delaying your Social Security start date, and reducing your withdrawal needs from IRAs and other accounts in your 60s will provide you more income for what I hope is a wonderful and long retirement.
SSA does not endorse any particular financial advisory product or service.
Did you find this Information helpful?
Thanks for your feedback!
Tags: full retirement age, retirement, retirement benefits, Social Security benefits
See CommentsAbout the Author
Suze Orman, Personal Finance Expert
Suze Orman is an award-winning personal finance expert.
Comments
Comments are closed.
Kệ c.
https://kechuahangdidong.com/Công ty kệ chứa hàng di động Navavina chuyên sản xuất, lắp đặt các loại kệ chứa hàng, kệ sắt, kệ để hàng, kệ để pallet, kệ sắt v lỗ, kệ để hồ sơ, kệ siêu thị, kệ nhà kho…
hangdathat.com
Luxury and Elegant Men’s Leather Shoes. High quality, beautiful and cheap cow leather southwest shoe shop in HCM City and Hanoi https://hangdathat.com/collections/giay-da
giayla.com
Strange Shoes Sneakers – Specialized sports shoes, lazy shoes Slipon, leather shoes VNXK export surplus genuine men and women genuine cheapest HN HCM. HOTLINE 0972 334 604 https://giayla.com/collections/giay-the-thao-nam
Tamtit
the project is quite good and smart, hoping to be successful. https://bit.ly/3aHQTxO
kitudacbietdep.com
The Beautiful Special Character Names help you name the Game Cool, Unique and Strange for the games: LOL, FB, PUBG, CONFIRM, GUNNY, CHAIN, CF, FO4, FREE FIRE https://kitudacbietdep.com/
Symbols 1.
Create nicknames with the most font generator ever, a collection of 1001 beautiful characters. Create your nickname with the most fancy text ever in the collection of 1001 text symbols and more. Cool symbols
azbaby
that Medicare doesn’t cover everything, and not many people have retirement health benefits from an old employer. On average, retirees end up needing to cover about 30 percent of their health care costs. https://azbaby.vn/
azbaby
Social Security benefit. That’s between age 66 and age 67 depending on the year you were born. The payout will be 25 to 30 percent higher than what you are eligible for if you start at age 62, which is the earliest you can claim. And ideally, if you are in good health and there is longevity in your family, I encourage you to devise a financial plan that allows you (or your spouse — whomever is the highest earner) to delay starting until age 70. Every year past your FRA through age 70 entitles you to a payout that will grow by a guaranteed eight percent. You can’t get eight percent guaranteed investing these days! https://azbaby.vn/
azbaby
Not saving on your own. Yes, Social Security will be an important source of income in retirement. But chances are it won’t cover all of your basic needs, to say nothing of a few wants. You don’t have a workplace retirement plan? Then, I want you to save up in a Roth IRA.
Eileen B.
It was helpful when you said that we should plan on covering 30% of healthcare costs on our own after we retire. Ever since my last birthday, I’ve been feeling older and more motivated to plan my retirement. Your article provided some helpful information that I’ll be sure to discuss further with a retirement planning service! http://familyfinancialpartners.com/retirement-solutions-lexington-ky