Sarah Danielson writes for Policy Expert where you can find public liability insurance quote and browse through various policies to find the right one for you.
They call it your golden years for a reason: because you’re in the money! At least, you will be if you spent a lifetime contributing to social security, a 401K, and other lucrative investments. In truth, it is a golden opportunity to finally get around to all the things you wanted to do (but didn’t have time for). You now enjoy the freedom to travel, volunteer, or simply sleep in for a change. On the other hand, the inaction of retirement after so many years of working can be an abrupt and frustrating life change that leaves you wishing for your old office back, which is why many people make the mistake of blowing their hard-earned retirement money prematurely. Here are just a few of the common blunders retirees make when they leave the working world behind.
1. Starting a business. Many people see retirement at a time to go into business for themselves. You’ve spent years slaving away for the benefit of a company that couldn’t care less about you, doing a job that you hate. But now that you’re out from under the corporate thumb and you have access to your long-term savings, you can finally open your umbrella factory! Hooray! The problem is, most small businesses fail within the first five years. You’d be better suited (if you want to keep working) to start a consulting business (low cost, high potential to earn). You don’t want to find yourself out of work and back at square one, so be smart when you start a business.
2. Buying big-ticket items. You may be tempted to use your money for a new house, a new car, or a three-month tour of Europe. But blowing thousands of dollars (or hundreds of thousands) right off the bat with no new source of income is a good way to deplete your saving (and fast). If you’re keen to spend a little money, avoid large lump sums and space out your expenditures. You can probably do everything you want, but you still need to budget accordingly.
3. Investing unwisely. Now is not the time to take a gamble and move all of your money into high-risk stocks. In fact, by the time you’re 5-10 years out from retirement, you should start rolling your investments into lower-risk options. You don’t stand to earn as much, but you also avoid the potential to lose a lot.
4. Failing to protect your money. There are many ways you can fail to protect your money, but probably the worst is by taking loans or withdrawing early from your retirement plan. Whatever it is that you want, you probably don’t need it badly enough to pay the additional 10% tax that you will incur (on top of regular income tax). A retirement plan, funny enough, is for your retirement, so you might want to save it for that purpose.
5. Underestimating longevity. If you retire at 65, you should plan for at least another 35 years of life. Although that may not leave you with a lot of money each month, it will ensure that you are likely taken care of for the rest of your life. One huge mistake people make is thinking that they only have another 15 or 20 years left to budget for. But with better nutrition and modern medicine on our side, it’s not uncommon for people to live well into their 90s or even pass the century mark. And you certainly don’t want to hit 85 and discover that you’re broke, so plan for the outside chance of long-term survival.