A 2020 survey of Americans over the age of 50 by the University of Michigan Health and Retirement Study found that many seniors have strong financial regrets.
The survey found that nearly 60% of participants regretted not saving more for retirement, 40% regretted not having long-term care insurance, and 37% did not work longer. 23% regretted not enrolling in long-term care insurance. social security too fast.
But financial regrets are not inevitable and need not be permanent. There are options for course correction even after retirement.
Here are four expert tips to help you avoid or reduce financial mistakes in retirement.
1. Care cost planning
“One of the mistakes individuals can make after retirement is not considering long-term care plans, including nursing home and assisted living needs. It can be costly,” attorney Celeste Robertson wrote in the paper. email. Robertson’s Texas law firm provides legal services related to family law, estate planning, probate and guardianship.
According to the US Administration on Aging, “Those who turn 65 today have an almost 70% chance of needing some form of long-term care services and support in the next few years.” On average, 3 years of nursing care is required.
Long-term care can cost thousands of dollars a month.Longest-term Nursing Home Care not covered by MedicareSo you will have to find another payment method.
2. Consider inflation
Nearly two-thirds of retirees say inflation and rising costs of living will be the “biggest financial shock” of retirement, according to a January-March 2023 poll by Edward Jones and Harris Poll. rice field.
Respondents cited inflation more frequently than the top three responses combined. These are unexpected medical or dental bills (22%), large housing or renovation costs (20%), and a significant drop in investment value (19%). ).
If your previous retirement plans didn’t allow for high inflation, it may be time to reconsider your retirement funds.
“It’s never too late to take action. Post-retirement adjustments can make a big difference,” Lena Haas, head of wealth management advice and solutions at Edward Jones, said in an email. wrote in
3. Stay in control of your investment
Whether it’s to deal with inflation or for other reasons, you may want to reassess your investment and withdrawal strategies to help keep your money in retirement.
Andrew Meadows, senior vice president of human resources, brands and culture at Ubiquity Retirement + Savings, wrote in an email that it’s a mistake to think of retirement investments as “set it and forget it.”
“Even though you’re retired, you still have to manage your retirement benefits, so it’s best to make sure it fits your current lifestyle rather than the lifestyle you were contributing to while working,” Meadows added. rice field.
4. Be prepared for surprises
Even if you have enough monthly retirement money, your finances need to be prepared for the unexpected.
“One of the things we often don’t plan for when it comes to retirement cash flow is spending a lot of money,” says Justin Prasad, a financial adviser in North Vancouver, British Columbia. Prasad said unplanned expenses such as roof replacement and unexpectedly large medical bills can cause problems.
And dealing with these issues may be harder today than it was in the past. Rising inflation means that unexpected expenses may cost more than before, while daily living expenses also increase.
There are options for recovering from a major financial blow after retirement, but they may vary depending on your circumstances.
Prasad has seen clients take reverse mortgages, delay retirement, take on part-time jobs and reassess when to use certain income streams.he recommends working with a qualified person financial adviser Find the best option for your situation.