Common Mistakes in Retirement Planning
This Blog is sponsored by Soundview Financial’s Retirement Savings Guide. Click here to visit Soundview Financial to get access to helpful articles, tips and resources for retirement planning.
I read a recent article on the common mistakes people make when approaching retirement. Here goes:
1. No current will. Even if you created a will when you were younger, it may be out of date as you approach retirement and no longer consistent with your state of affairs or assets. Update it.
2. Out-of-date beneficiary designations. Beneficiaries named in life insurance policies and retirement accounts (such as IRAs and 401(k)s) must be up to date to avoid misunderstandings and possibly adverse tax consequences for your heirs.
3. Concentrated stock holdings. Whether through long association with a single employer or as owner of your own business, you may have a significant portion of your wealth tied up in a single stock. Nearing retirement, it’s too risky to keep so many eggs in one basket. Diversify.
4. No excess liability insurance. Auto and homeowners’ insurance policies offer liability protection if someone comes to harm on your property or in an accident involving your car. If claims exceed your policy limits, plaintiffs could come after your personal assets. Carry an excess or “umbrella” policy for added protection.
5. No estate or tax planning. Many retirees craft an investment plan but overlook estate and tax planning. Start the process now if you haven’t already, both to minimize tax bills for you and your heirs and ensure that your estate is distributed according to your wishes.
6. No planning for health care or long term care. Costs associated with ill health can overwhelm an otherwise sound investment and retirement income strategy. Learn hothe federal Medicare health insurance program for people 65 an older works, how private insurance can plug gaps in Medicare, and whether long term care insurance might be right for you.
This Blog is sponsored by Soundview Financial’s Retirement Savings Guide. Click here to visit Soundview Financial to get access to helpful articles, tips and resources for retirement planning.
