Planning for retirement is a journey. You have likely been saving for and envisioning what your ideal retirement lifestyle looks like for years, even decades. You have been working toward this goal for your entire life, but have you been planning strategically?Silver Comet Village is a retirement community in Powder Springs, Georgia. We know how crucial having a solid plan for retirement is in order to create and enjoy your desired lifestyle. We are sharing common retirement planning mistakes along with solutions to fix them so you can better prepare for your retirement years!
Mistake #1: Not Having a Financial Plan
The biggest mistake an individual can make regarding their retirement is not having a plan at all. To create your desired lifestyle, you have to plan what that will look like.
- Where do you want to live, and what is the average cost of living there?
- What kind of lifestyle are you envisioning?
- What expenses will you have (housing, car, travel, etc.)?
By figuring out the details of your desired retirement lifestyle, you will have a better idea of how much you need to save and when.
Mistake #2: Relying Too Much on Social Security
This is a common retirement planning mistake that many people make. Individuals often assume that social security will cover most, if not all, of their monthly bills; however, this is not necessarily the case. According to The Motley Fool, “the average senior today collects $1,543 a month” from Social Security. This equates to only $18,516 per year.
While this is only an average and an estimate, it is important that individuals consider this when planning finances for their retirement.
Mistake #3: Not Maxing Out a Company Match
If your company offers a 401(k) benefit with a company match, make sure you take advantage of the full match. This is essentially free money that you are leaving behind if you do not max out the match. For example, if your company offers a 4% match and you contribute 4% of your salary into your 401(k), your employer will contribute the same amount into your account.
Mistake #4: Bringing Debt into Retirement
Retiring often means that you will be moving to a fixed income. Having a significant amount of debt after you retire can be detrimental to your financial health and take up a lot of your retirement savings. Do your best to pay off, or at least pay down, your debt before you stop working.
According to Forbes, “eliminating your credit card debt prior to retirement is your most important job.” Forbes recommends targeting extra payments toward your most expensive (the ones with the high-interest rates) credit card debt so that you will save more money in the long run.
Mistake #5: Not Planning for Future Health Needs
Staying active and eating a balanced diet are great ways to stay healthy, but none of us know exactly what the future holds. It is good to think positively about your health and do everything you can to lead a healthy lifestyle, but it is also important to be prepared in the event of an unexpected health concern.
As we age, we are at more of a risk for developing chronic health issues. This means that your retirement financial plan should factor in the unknown. Plan and save for long-term care and unexpected health issues. By doing so, you will be prepared should you ever need it.
Mistake #6: Thinking it’s Too Late to Start Saving
While it is best to start planning for retirement at a young age, it is never too late to create a retirement plan. There are catch-up provisions for individuals over the age of 50 that allow additional contributions to retirement accounts.
AARP reports that “for 2021, the IRS is allowing individuals to contribute an additional $1,000 to an IRA on top of the standard $6,000 limit…If you have an employer-sponsored 401(k), you can max out your contributions by adding $6,500 over the $19,500 limit.”
Retirement planning is so important to your future. Contact a member of the Silver Comet Village team to learn more about what our retirement community in Powder Springs, Georgia, has to offer and how we can help you create your desired retirement lifestyle.
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