6 Financial Pitfalls to Avoid in the Decade Before Retirement

Retirement Income

6 Financial Pitfalls to Avoid in the Decade Before Retirement

Posted by Asset Protection Group
1 month ago | January 18, 2021

It can be easy to make financial mistakes at any age. But during the decade or so before retirement, certain pitfalls can seriously hamper your retirement plan. Many wannabe-retirees have made the following mistakes and ended up forced to alter their retirement plans due to the fallout.

Prioritizing college over retirement. As with retirement, college planning should be conducted many years before the need for tuition ever arises. Of course, not everyone plans ahead to this degree. If you find yourself facing a large tuition bill and short on college savings, explore every other possibility rather than raiding your retirement funds. Your kids have many decades ahead of them to repay college loans, but your retirement date is looming on the horizon.

Abusing your home equity. There are situations in which home equity loans are necessary or even a wise choice, but in many cases these opportunities may be used to fund vacations, hobbies, unnecessary remodels, or to pay off credit card debt. Resist the urge to fund your lifestyle with home equity lines of credit, or you might not find yourself retiring mortgage-free.

Competing with the Joneses. Always make your own financial standing a top priority, rather than worrying about what everyone else is doing. Yes, your neighbors’ shiny new boat is appealing, but so is a stable retirement. If you can’t afford it without jeopardizing your retirement, we feel it’s not worth it in the long run.

Co-signing loans with your children (or anyone else). In the event that the other party gets into financial trouble and can’t pay, you will be responsible for payments on the loan. And that could put you in a sticky position indeed, if your monthly expenses go up dramatically just before you’re set to retire.

Failing to prepare for the unexpected. Have you met with an estate planning lawyer to prepare for unexpected scenarios.? At minimum, we believe everyone needs a healthcare directive, a will, and life insurance to protect their loved ones.

Overlooking your options. As you enter the home stretch of your career, meet with us regularly to review your current financial position and future outlook. We can help you identify potential financial opportunities that may benefit you.

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