Are you about to retire or have you just recently retired? If you are at either of these stages in your life you are probably realizing just how important money is right now. This is a crucial time for you and your money. So you may be looking for money advice. It’s always good to hear good tips but what about money mistakes? You want to know what not to do to with your money when you retire. Here the top four money mistakes retirees make.
Making a big purchase – It can be temping to make that huge purchase in retirement you have been dreaming about since you started working. However, that splurge item really takes a hit to your savings. Resist the temptation to splurge on that big ticket item.
No cash cushion – Having cash at the ready is one of the most important things you can have in your retirement. No matter how hard you plan for things in life, you get surprised by things in life. Having cash at the ready for an emergency home repair or emergency health issue is critical for your financial health. One huge expense can send your retirement plans into a tail spin.
One option that many retirees are discovering for a way to have a cash cushion is with a reverse mortgage. Most senior home owners have large amounts of equity in their home. With a reverse mortgage it gives the homeowner the ability to access that equity in their home, receive the money tax-free* to be used for anything. With a reverse mortgage you can choose to take your proceeds in a line of credit to be able to use at the ready for expenses that may come up in life.
Relying on the market – You should ride the stock market not rely on the stock market. The investment world is a roller coaster and if you cannot live past the downs you will never get to enjoy the ups. Simply you need to accept that there will be good days and bad days. If seeing your stocks fall so low and are not willing to wait for the rise, you might want think about getting out of the market.
Putting off planning – When it comes to planning for your retirement you need to have an idea of exactly what you want to do. When will you collect Social Security? How long will your savings last you? What kind of hobbies do you want to have in your retirement? Do you want to travel? These are a just a few of the things you need to plan for.
Being able to retire is an amazing feat. Having money to do what you want in your retirement is even more of an amazing feat. But it can happen. These tips can help you avoid any money mistakes when it comes to retirement. And remember you do have options for money in your retirement like a reverse mortgage.
*Please consult with your financial advisor.