After a hiatus last week, we continue with Financial Mistakes People Make in Their 50s
Retirement is just around the corner, and what you do at this point is critical to your quality of life when you finally retire. Don’t make the following 2 major mistakes or all your planning may go to waste.
Dipping into Your Retirement Fund Too Early
By now, you should have a pretty significant sum of money sitting in your investment and savings accounts, if you have been following the advice in the previous articles.
But it can be very tempting to dip into it and use it on that luxury item you have been eyeing on for so long. When else should I buy it if not now, right? No, don’t do it.
You may also be facing financial pressures now that your kids are entering college and wants you to pay up the tuition fees. Again, don’t do it.
The retirement fund should be used solely for your retirement. If you are facing a new financial pressure, keep where your retirement funds are and don’t let anyone pressure you into taking them out.
Find another way to deal with the financial pressure, or preempt the financial commitments earlier in your life.
College funds can be saved up a lot earlier, and even a financial crisis from unexpected medical conditions can be prevented by buying medical insurance earlier in life.
Underestimating Retirement Costs
Most retirees don’t spend much on food and entertainment every month, and spend practically nothing on housing if the mortgage has been paid off.
But there is a cost many people overlook when they plan for retirement – the medical bills and cost of healthcare.
You can mitigate the bulk of medical costs if you buy a life or term insurance that covers you during your retirement, but the reality is that you might need nursing home care in your 70s and 80s. These costs can quickly add up to over $5,000 a month, so make sure you plan ahead for it.
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