Avoid These 6 Dangerous Retirement Decisions

6:53 pm Retirement Planning

risk sign Avoid These 6 Dangerous Retirement Decisions A recent post on Forbes.com listed six ways that short-sighted financial moves could permanently derail your retirement plans:

Tapping into an IRA early.  While you may be tempted to break into your IRA to pay down debt, you are robbing your future if you do.  Besides eroding your savings, you will be paying taxes on the withdrawals and penalties for early withdrawal.

Taking Social Security early.  If you delay taking Social Security benefits, you’ll be earning more every month for each year you delay.  For example, if you were to quality for $1,000 per month at age 62, you’ll get 30 percent more if you wait until your full retirement age (between 65 and 67, depending on the year you were born) and 70 percent more if you wait until you’re 70.

Treating your nest egg like a windfall.  Look at your 401(k) or pension as a big part of your future financial security, not as a windfall that you may feel free spending.

Buying long-term care insurance you can’t afford.  If you do invest in long-term care insurance, be sure you can afford the payments that are sure to rise in the future.

Purchasing an annuity with no survivor benefit.  While the bigger payout from a single-life annuity may be tempting, you will be short-changing your spouse in the long run.  Single-life annuities make sense for singles.

Thinking that a reverse mortgage will cover all your housing expenses.  While a reverse mortgage can allow you to pay off your mortgage, it will not pay for property taxes, homeowners insurance or maintenance costs.  If you don’t have enough to cover those, you will be in default and may lose your home.

Making safe retirement decisions is key to enjoying your retirement years, so contact our Costa Mesa law firm for the guidance you need.

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