If you recently became retired or you’re about to retire in the near future, it’s important to prepare financially. Adjusting to a post-retirement life can take some time, and as such, many retirees tend to make some financial mistakes along the way. Some of the following are common money mistakes that retirees make, and ones that you should try to avoid:
Not opting for maximum Social Security benefits
Retirees can technically begin taking advantage of their Social Security benefits and begin receiving payments once they turn 62, but that doesn’t mean they should. Because the benefits will be reduced by opting for payments at age 62, it’s likely in your best interest to wait until you reach full retirement age, which is age 66, and your benefits will increase by 25 percent. And if you enjoy working and you like your job, consider the advantages of working until age 70, when your Social Security benefits will increase by an additional 32 percent. Otherwise, unless you have a significant amount of money in savings and another form of steady income, you might regret retiring at age 62.
Retiring too soon
For some, Social Security payments aren’t enough to take care of bills and other expenses. If you retire before you’re ready, and whether or not those Social Security payments have kicked in yet, you might be setting yourself up for financial hardship. Ask yourself several questions before making the decision to retire, and consider how much debt you have, how much money you have in savings, and other financial obligations you might have. The last thing you want after you retire is to struggle financially.
Failing to recognize scams
When it comes to financial scams, a lot of con artists tend to target senior citizens. As such, many older retirees are taken advantage of, and don’t realize they’ve fallen victim to a money scam until it’s too late. Whenever money is involved, remember to always proceed with caution, and familiarize yourself with some of the common money scams that specifically target older people and retirees.
Not making a budget
If you were able to get away without having a budget prior to retirement, you might not think it’s necessary once you do retire, either. But because financial situations change significantly for retirees, this is another common money mistake that many people make once they stop working. Without a detailed budget set in place, it can be easy to overspend, overlook important bills and expenses, and so on. If you did have a budget prior to retirement, it’ll likely need a complete overhaul. Without making changes to a budget so that it suits your post-retirement lifestyle and financial situation, it can lead to money problems.
Not understanding inflation
The value of a dollar today won’t be the same many years from now, and while it’s always a good idea to prepare in advance for retirement, many people overlook this fact. As you prepare financially for your future retirement, remember to also take inflation into consideration, or you might be unprepared when it finally is time to retire.
Whether you could use some extra cash to take care of bills during your retirement, or you have dreams to retire early and have debt to pay off, Peachtree Financial Solutions may be able to help. Contact Peachtree Financial Solutions today if you’re receiving structured settlement payments, but would prefer to receive your money sooner. At Peachtree, we can purchase some or all of your future payments and provide you with a lump sum. Contact us today!
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.