August 16, 2022
6 Moves to Avoid When Planning for Your Retirement
If you’re in the home stretch to retirement—congratulations! It’s an exciting time, but it can also be a bit of a stressful time to make sure that your financial situation is sound enough to be able to stop work and enjoy your golden years.
Centers Health Care has details on six things to never do when you’re getting ready to retire.
- Keep the Planning to Yourself
You’ll want to have a financial advisor to manage (or at the very least review) your plan, especially if you have complicated investments. If you don’t have one, ask around. Check with trusted friends, family members, and co-workers for a referral.
- Ditch Your Emergency Fund
It’s recommended to keep at least three months’ worth of expenses in an emergency fund during your working years, but experts actually say you should bump that amount up when you’re going to retire because medical issues and accidents tend to occur more often as you age.
- Putting All Eggs in the 401(k) Basket
Having a 401(k) through your employer is great, but the investment and withdrawal options are limited, so financial analysts say that you should have another investment account with some more flexibility, such as a Roth IRA.
- Not Diversifying Your Investments
Go beyond the stock market, which can rely too much on factors like the economy and inflation, and diversify with products like gold and other precious metals.
- Not Generating Passive Income
If you’re able to still have some cash rolling in even when you leave your job, you’ll be far ahead of the game. Real estate is a popular investment for this purpose.
- Staying in Debt
In a perfect world, you’ll want to eliminate all debt before you retire. But if that’s not possible, you certainly want to remove high-interest debt from things like credit cards and student loans. A personal loan can help consolidate debt and give you a better plan to pay it off.