7 Retirement mistakes that you should avoid

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By: Anonymous
on 25th May,2016

Planning for retirement is a lifelong pursuit.
7 Retirement mistakes that you should avoid

Planning for retirement is a lifelong pursuit. It is quite important to start planning for your retirement immediately when you start your professional life.  Your post-retirement life is the time to sit back and enjoy the fruits of your labor. However, it has been found that a large number of senior citizens face tough times during the golden years of their life. Thus, while you're planning for your retirement, try and avoid the following 7 mistakes:

1. Overconfident about investment skills: This is a common misake which most of us tend to commit. We should agree to the fact that some of us understand investment better compared to others. Thus, it is better to take professional help when you're planning for any kind of investment to be on the safer side.

2. Over gifting children may affect your post-retirement life: It gives us immense pleasure to gift assets to our near and dear ones. However, before doing so, we should check out whether or not we're jeopardizing our post-retirement life. It won't be a good idea to become a burden on our near and dear ones after retirement - isn't it? You should definitely offer gifts to your grandchildren, butnd-children but make sure you have ample assets to sustain you throughout your retirement.

3. Misusing your 401k: You should check out whether or not your company offers a 401(k) match. If yes, then make sure to get it. If you're planning to change your job, don't forget to roll over the 401(k) investments to your new provider. Don't cash it before you're 59 ½ years of age or you may have to pay a 10 % penalty.

4. Avoiding to plan for long-term care: It is true that not all of us will require long-term care. But it is better to plan for long term care in advance so that you can avoid a sudden financial crisis during your post-retirement life. You can purchase long-term care insurance policy in order to be on the safer side.

5. Early retirement: Due to the present market situation, a large number of people are retiring quite early. But not all of us are prepared for an early retirement. For example if you start receiving Social Security at age 62, you will be receiving reduced benefits. Thus, it is better to wait till you're 65, in order to receive maximum benefits.

6. Ignoring your estate planning: Estate planning helps you in deciding how your assets should be distributed amongst your heirs when you're no more. Thus, it is better to contact an estate planning attorney in this regard and sort out this matter.

7. No prenuptial agreement: Most of us ignore the importance of a prenuptial agreement. This is very important if you're marrying for the second time. Such an agreement will protect you from your spouse's financial problems including student loans, child support, caring for elderly parents, etc. Moreover, a prenuptial agreement will waive off or limit your spouse's right of share in your property.

Avoiding these retirement mistakes will surely make your post-retirement life happier. You will be able to enjoy the golden years of your life with your family and friends without becoming a burden on them.

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