After working your entire life to build a retirement fund, it is important that you are careful to protect your assets during retirement. A few proactive steps can help you to maintain your retirement income through the rest of your life, but there are a few common mistakes that need to be avoided. If you are nearing the age of retirement, these are three things that you should consider:
Watch for Financial Scams
Retirement-aged individuals are often targeted by scammers because retired people have money to spend. Don’t be fooled into an investment plan that seems too good to be true! It is common for retired adults to be approached by individuals offering investment services. But, often these investment plans will leave you in a difficult financial position after you have lost your retirement savings.
Limit Cash Withdrawals
Withdrawing too much money from your retirement account can result in a situation where you are risking your retirement income. Talk with a financial planner about the right withdrawal rates to match your individual plan. Pull out enough money for essential expenses. At the same time, limit the amount of money that is being spent on non-essential items and activities. Most people can withdraw between 4% – 5% each year and then adjust the withdrawal amount based on inflation.
Manage Health Care Expenses
It’s not surprising that health care costs increase with age. Two factors affect the health care expenses that you will need to pay: declining health and increases in the prices of medical services. Also, many people are living longer, which means that their anticipated medical costs will go up during retirement.
The most effective way to manage health care costs is to ensure that you have a good insurance plan to cover the expenses. Most people find that it is too expensive to pay for these costs from their retirement savings. But, they can afford a monthly premium for a good insurance plan.
For more information about insurance coverage during retirement, we invite you to contact our experienced team right away. We know that insurance is essential to manage your spending during retirement, and we are here to help!