Retirement planning is a huge process, and you are bound to make mistakes along the way. Fortunately, you can correct your mistakes early in most cases and reverse course or avoid making them in the first place when you have good counsel. In this blog post, we discuss some common retirement planning mistakes as indicated by Investopedia and U.S. News and World Report along with what you should do instead.

Taking Social Security Too Early Can Result in a 30 Percent Lifetime Pay Cut

Just because the federal government allows people to apply for social security benefits as early as age 62 does not make it a good idea. We understand that you may have no choice in some situations, like losing your job sooner than expected or poor health making it impossible for you to work.

The above represent two good reasons why filing for social security benefits early is an option in the first place. You just need to understand that the trade-off for doing so is that your benefits could be up to 30 percent less than if you had waited until you are 67 years old to start your claim.

With an average life expectancy in the United States of 77 for men and 81 for women, you could be missing a significant amount of social security funding by taking the benefit as soon as you are eligible. Keep in mind that you can tap your retirement savings as early as age 59 years and six months, which can give you enough income to wait until age 65 or 67 to claim social security benefits.

Approaching the Retirement Years without a Financial Plan

Even if you wait until you are at least 65 years old to retire, you could have 20 or more years ahead of you to finance without the benefit of a job. You do not want to leave something as important as retirement planning to chance. We recommend visiting a certified financial planner who considers these factors when helping you create a financial blueprint for the retirement years:

  • Age you plan to retire
  • Anticipated healthcare costs and known health issues
  • Anticipated lifespan
  • Preferred geographic location for retirement
  • Type of post-retirement lifestyle you would like to lead

Even though retirement planning is extremely important, you also need to keep in mind that life has a way of throwing unexpected curveballs at people. Be sure to remain flexible with your financial plan and willing to change it should the need arise.

Inadequate Tax Planning

For better or worse, your income during retirement will be different than it was during your working years. Now is the ideal time to consider your approximate income after retirement and plan your taxes accordingly. Too many people do not adjust for the change and then end up with a nasty surprise when they file their first annual tax return after retirement.

Considering a Move to Florida After Retirement? Start Planning Now

With five locations in Central Florida, Solivita Living is proud to serve the active 55+ retirement community. We invite you to contact us to learn more about moving to Central Florida and reaping all the benefits of a retiree-friendly state.