7 of the Worst Retirement Planning Blunders

Many financial blunders can break someone during their golden years. Here are seven of the worst decisions a retiree can make.

First is assuming you will retire at a specific age. In reality, that depends on several factors, many of which are beyond your control. Counting on those final few years before retiring to save can backfire, which is why it’s imperative to start retirement planning early.

Next is relying on the advice of friends and family instead of a professional. Assess your situation with an expert. Your buddy may have done well with his retirement, but that doesn’t mean he can guide you.

Third is starting Social Security too early. You first become eligible at 62. But the benefits grow every year you delay taking them until you’re 70, at which point they’re almost twice what they were at 62.

Fourth is overlooking tax consequences. Most retirement options have specific rules for withdrawing money. Knowing them can save you from penalties and problems that stem from removing money too early or too late.

Fifth is not updating your retirement plan. Don’t dump all of your higher-risk equities in favor of low-risk bonds. They won’t sustain your retirement income for 20-plus years. You still need some growth.

Sixth is failing to understand distribution. Learn the best times to remove and transfer funds from retirement accounts to personal accounts in order to avoid penalties.

Seventh is underestimating future healthcare spending. It’s estimated a 65-year-old couple will incur $220,000 in medical expenses.

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[DarolTuttle]

Hmmmm Just so you know, my law firm's record for the highest amount a client paid per month for unreimbursed medical expenses is $30, 000 per month. This particular client would have had to pay that amount for the rest of her life which was 18 months. Second place came in at $18k per month. Third place is $17k per month and there are tons of cases tied for fifth at about $12k per month. I understand and accept that messaging has to be simple and to the point. However, from my perspective, the ONE planning blunder is arrogantly or ignorantly defying the laws of money as it relates to care costs. I have seen family after family blow it, scramble at the last minute when it is really too late and then watch helplessly as the estate depletes. Wow! What a bummer man I am. Sorry. Trying to think of a optimistic way to put that but haven't quite figured out the line yet.