Retirement Money Mistakes

Retirement money mistakes can be avoided, even if you're 50 years old and plan to retire at 55. If you're 50 and up, you could be among a group of people who aren't waiting until they are 65 years old to retire now.

The premise is to retire while you're young and healthy, so you can at least enjoy some of your retirement years. You would be amazed at the amount of people who are retiring, and in a few years they are dead.

But if you plan to retire soon, then there are some mistakes you should avoid, that will make your retirement life more pleasant and rewarding.

Waiting Too Late To Save Money

One mistake is waiting until you're five years away from retiring, before you start saving for retirement, or you wait until then to check your retirement plan and finances.

The sooner you do this, the better prepared and the more finances you will have. People are living longer, so it will take more money for living expenses than it did 20 years ago.

If you happen to be one of the late starters, you can still save money, but it's going to take budgeting and really cutting back on items you've probably grown very accustomed to having.

Selling Your Home And Moving To Someplace You Hate

If you're retiring soon, you may want to consider selling your home, and moving to a part of the country that's not as expensive. Or moving into a smaller place. If you do this, make sure you move to someplace you love and want to be.

Don't make the mistake of selling your home, and not liking where you moved to because of your family, friends or the weather. Once you sell your home, there is no going back.

Don't Withdraw Money From Your IRA

Unless your IRA is the only source of retirement income, why not wait until later to withdraw the money. You have to wait until you're 59 1/2 before you can withdraw without paying the 10% penalty.

But you would still have to pay taxes on that withdrawal, so why not wait a few more years before you start withdrawing. During that time frame, your account will still be making money.

Depending Solely On Pension And Social Security

You really can't depend on either. The pension you receive is fixed income and will never be more than what it is. Social Security is being taxed, and it won't necessarily keep up with inflation.

Whatever you get at retirement will soon loose its value, because the price of living will increase, while your pension and Social Security remain the same.

Early Retirees Investing In Fixed-Income Securities

If you retire between the ages of 50 and 60, why invest either primarily or entirely in fixed-income securities? You will probably live into your 90s or more.

So why not invest where you can receive an increasing income stream. You want your money to continue to grow when you retire. You don't want it to stop.

If you plan on living until you're 90 or 100 or more, you want your income to be there with you. It's no guarantee that you will live that long, but at least you'll have the money either way.

Planning For Long-Term Care

It does happen eventually, but a lot of young retirees don't plan for long-term care.

If you're looking at a million dollars in assets, then you can pay for your own long-term care. But for most of us, we're lucky if we have a hundred thousand dollars in assets.

If you do have $100,000 or less in assets however, and you're 65 years old, Medicaid may take care of that expense for you. But being younger and in need of long-term care puts you in a different category.

Either your insurance will cover this expense until you turn 65, or you will have to look into purchasing long-term care insurance. This can be an added expense for anyone who is considering retiring. Long-term care insurance can be anywhere from $2000 to $3000 per year.

Retirement money mistakes can be avoided with a little insight and planning. You don't have to know everything, all you have to do is look around at the people you know who are retired.

Discover their mistakes and learn from them. Plan now for what you want at retirement. Don't wait until this year to start making retirement plans for next year.