Biggest Retirement Planning Blunders You Should Avoid In 2014

According to a research, it has been found out that one of the biggest reasons behind hiring a financial planner is to know whether or not people can retire well and if yes, when they can do so. The very thought of retiring may cause anxiety and you may always feel either unprepared or overwhelmed with questions and doubts. Given the fact that majority of Americans spend more time planning their vacations than their retirement, it is even more important for them to plan their golden years so that the shadow of death doesn’t chase them to death. In fact, one of the most crucial dilemmas for all those who are approaching their retirement is to balance their life that they want to lead today as against the life they want to lead after retirement. If you too are someone who is about to retire, check out some of the biggest retirement blunders that you should steer clear of.

Mistake No.1: Living life king-size

The most important question that the financial planners ask their clients is how much income they need to maintain the present kind of lifestyle post retirement. Majority of the baby boomers aren’t even aware of this number as they have never spent time calculating. If your assumption is too low, which is true in most cases, you may fall into a troublesome situation later on and you may have to make drastic changes. The usual thumb rule is that you may need at least 80% of your income in retirement. Retirees spend more on travelling, eating out and entertainment. Consider all these before you live life like a king and avoid saving money.

Mistake No. 2:  Not considering soaring medical costs

One of the most overlooked portions of retirement planning is underestimating the health care costs. Medical costs and health care prices are gradually spiralling out of control and if you don’t take the steps to maintain good health conditions and arrange sufficient coverage on your health insurance policies, you’re soon going to dig your own grave. You could feel strapped for cash after retirement. Hence, determine your current health conditions and assess the costs that you may need after retiring.

Mistake No. 3: Lack of long term health care plan

Anyone who has been caring for an aged parent knows very well what toll it takes on their savings. Both your time and money that you may spend for your parent can have a staggering impact on your personal financial needs. As per the US Department of Health, 75% of people who are above 65 will require some kind of health care in their lives. Hence, it is important to have a long term health insurance plan so that even when you fall sick, there’s no such financial burden created on the shoulders of your children. You may sit with an insurance advisor and check out the exact amount of coverage that you may need to protect your near and dear ones from going bankrupt.

Hence, if you’re someone who is about to retire, ensure taking into account the above mentioned blunders before you retire. If needed, you can hire a financial advisor who can promise to take care of your finances and maintain a happy and healthy retired life for you.