“It’s a difficult pill to swallow when you realize you’ve made a financial mistake, particularly when it’s an avoidable one. Some of these mistakes can cripple your finances for years, so it’s crucial to be as informed as possible when making monetary decisions.
Far too many times, I have listened to retirees lament the previous financial choices they made or didn’t make. Here are the **top 10 most common reasons** retirees wish they could have a financial planning do-over, and how you can avoid making a similar mistake.”
1. All About the Numbers – Retirees frequently put too much emphasis on investments and net worth while overlooking the other important things they need to live their best life. (If this is you, you might want to learn more about the ROL index
2. An Overlooked Factor – People sometimes forget to account for the impact of inflation and healthcare costs. These two often overlooked factors can wreak financial havoc if you live beyond your expectations. It’s critical to account for these two elements when planning and budgeting after retirement.
3. Wrong Safety Net – Too often retirees count on the government (Medicare and/or Medicaid) to pay for long-term care and didn’t seek out an expert opinion to make sure this would cover them. This is unfortunate because there are sometimes various legal and financial options that offer better protection against this health risk.
4. Flying Solo – Sometimes people make a huge financial mistake in thinking they can go it alone and avoid hiring the right kind of professional help, like that of a CERTIFED FINANCIAL PLANNER™ practitioner. Surprisingly, this often happens because people think their net worth is too low or the costs are too high. What people fail to realize is how the right financial planner can help make the difference between working confidently towards your retirement goals or not.
5. A Potentially Serious Oversight – They experienced significant losses in the first 5 years of retiring and made no concessions. Losses will likely still happen during your retirement years. The problem is not adjusting accordingly and this can lead to greater repercussions in the future.
6. Wrong Fit – There are plenty of retirement products out there, but none are intended to be one size fits all. Sometimes retirees purchase a retirement product that was perhaps not ideal, too expensive or not necessary – but it felt right at the time. It’s important to constantly reevaluate. Think of it like this: financial products should complement your goals and abilities not compete with them.
7. Overshot Their Longevity Outlook – Modern advances in medicine are enhancing the quality and prolonging life. This means you can’t rely on the terminal age of your family members to plan for your own retirement needs. Don’t regret only planning your finances to last you until you’re in your 80’s when one of you may live to 100.
8. Improper Balance – Some people spend years of retirement fearful of losing their nest egg and end up putting all their money into CDs and savings accounts. This may prevent you from living to enjoy it! Thus, becoming someone who is well into retirement and nearly out of money, blaming the banks and/or the government for low-interest rates; while overlooking inflation and natural economic cycles that may have been the real culprit.
9. Flaw of Averages – Retirees will sometimes fall into the trap of using an online planning tool or spreadsheet that relies on average rates of return assumptions, or worse – no tool at all, to decide when to retire and how much they could afford to live on during retirement, watch this video to learn more.
10. Hidden Risks – Don’t let the whims of the market dictate your financial success with an outdated systematic withdrawal plan. Instead, retirees should implement a sound income strategy plan that helps overcome the unpredictable nature of sequence of return risk. Click here to learn more.
You can’t plan for everything, and life tends to throw us a curveball now and again, but you can avoid having these 10 regrets in retirement with a plan and proactively monitoring your plan.
While I can’t promise a do-over, I can help you get moving on your “no regrets” plan. It all starts with a conversation.
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