Navigating Retirement Pitfalls
KERRY ANDERSON, ANDERSON WEALTH & RETIREMENT
From time to time, classic financial missteps have been known to plague retirees. Calling them “missteps” may be a bit harsh, as not all of them represent errors in judgment. Either way, becoming aware of these potential pitfalls may help you to avoid falling into them in the future.
Managing Social Security
Social Security benefits are structured to rise about 8% for every year you delay receiving them after your full retirement age. Is waiting a few years to apply for benefits an idea you might consider? Filing for your monthly benefits before you reach your full retirement age can mean comparatively smaller monthly payments.
Planning for Potential Extended Care Costs
According to the U.S. Department of Health and Human Services, 7 out of 10 Americans turning 65 are going to require some sort of extended care.
Understanding Longevity
Actuaries at Social Security Administration project that around a third of today’s 65-year-olds will live to age 90, with about one in seven living 95 years or longer. The prospect of a 20 or 30-year retirement is not only reasonable, but it should be expected.
Managing Income / Withdrawals
You may have heard of the “4% rule,” a guideline stating that you should take out only about 4% of your retirement savings annually. Each person’s situation is unique but having some guidelines can help you prepare.
Managing Taxes
Some people enter retirement with investments in both taxable and tax-advantaged accounts. Which accounts should you draw money from first? To answer this question, you may want to consider having a qualified financial professional review your financial situation so they can better understand your needs, goals, and risk tolerance.
This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your investment strategy for tax considerations.
Managing Other Costs
There is no “financial aid” program for retirement. A financial professional can help you review your anticipated income and costs before you commit to a long-term strategy, and help you make balanced decisions.
Kerry Anderson is owner of Anderson Wealth & Retirement in Lincoln, NE and has over 30 years of experience in the financial services industry. If you wish to arrange a meeting or would like to discuss anything pertaining to this article, Mr. Anderson can be contacted at 402-265-5753 or at andersonwealthgroup.com.
1. Social Security Administration, 2021
2. GenWorth.com, 2021
3. LongevityIllustrator.org, 2021