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Retirement | XLFinancialBlog.com

Avoid These Retirement Pitfalls

Posted on 06. May, 2015 by in Financial Planning

Retirement can be a glorious stage where you finally have time to do all the things you have been putting off. Do not make these mistakes, though, and add worry to your plate later on.

 

Not Saving Enough

One mistake many people tend to make is underestimating how long they will actually live past retirement. Assume you will be here long after the average age to ensure you will be properly covered. You will also want to spend your golden years enjoying things you did not have time for when you were busy at work, so have extra saved for those activities.

 

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Neglecting Your Health

The easiest way to eat up your savings is to spend your money on medical costs. While there will likely be expenses that are unavoidable, there are many that you can reduce or eliminate altogether by taking care of your health now and preventing issues down the road.

 

Dipping Into Your 401(k)

Do not treat your 401(k) like a regular savings account. Keep the mindset that it is completely off limits to you now. While it is possible that a very extreme circumstance may force you to dip into you 401(k), try to it alone so it can serve its purpose down the road. There are also serious financial penalties that you face when you withdraw from it, which can make a big impact on your financial health both early on and later.

 

Unnecessary Spending

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When you first enter retirement, keep in mind that the money you have will need to last, even with a substantial savings. Do not be tempted to overspend on extracurriculars that quickly eat into your money. Be conservative with how you spend your money and whether purchases are truly beneficial to your quality of life both in the short term and long term.

 

Late fees and interest charges are another way to spend unnecessarily. Set up automatic payments to ensure you do not miss due dates and end up paying hard-earned money for no good reason. Also try to eliminate commercial debt that will result in high interest charges.

 

Retirement can be a time to relax and enjoy the world you have built. Make sure you avoid these pitfalls to keep money concerns out of your retirement plan.

 

 

 

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