When you retire, you lose your salary and, with it, an important portion of your monthly income. If you’re not careful, that drop in income can lead to a lot of financial problems. That’s why avoiding costly mistakes becomes so important after retirement, especially if you want to make the most of it.
This article will take a look at the top three mistakes retirees make.
1. Not planning for unfortunate life events
The loss of a loved one can be emotionally devastating. Unfortunately, it can also destroy your finances if you’re not prepared. Medical costs, funeral costs, these can take away your savings in a very short period of time. And it won’t stop here. Losing a spouse also means that a household also loses one social security benefit. And this invites even more problems into a senior’s life.
Such tragic events can’t be stopped. And the chance of at least one of them occurring during retirement is extremely high. Fortunately, there are multiple ways to protect yourself against them. Start by saving or setting aside some additional funds for such events. Additionally, don’t forget to buy the necessary insurance. It can help save both your life and your finances.
2. Having a risky investment portfolio
As the last financial crisis taught us, investing all your money in one thing can be a huge mistake. It only takes one crisis to bankrupt you, and it doesn’t even have to be a big one.
If you want a quiet, peaceful retirement, you have to make sure that your investment portfolio is free of risk. Try to keep it as balanced as possible and you should be fine.
3. Rushing to claim Social Security Benefits
Retirement can last for at least 20 years. That’s a very long time, so you have to make sure that your retirement money lasts. Fortunately, Social Security can help you out. It can be an inflation-protected income source during retirement, and, if you manage to make the most of it, you will be able to take some pressure off of your savings.
You don’t have to start receiving Social Security benefits at 62. You can wait until you’re 70. The more you wait to receive those benefits, the bigger the inflation increases will be. So delay getting them as long as possible for your situation.