Retirement should be a time of relaxation, enjoyment, and pursuing your passions. But too often, we see people make critical mistakes that can derail their retirement plans and leave them financially stressed. At Atlas Wealth Advisors, we’re dedicated to helping you avoid these pitfalls and achieve the retirement you deserve. Here are five of the biggest retirement planning mistakes to avoid:
1. Underestimating Your Retirement Expenses: Many people underestimate how much they’ll actually spend in retirement. It’s easy to assume your expenses will decrease, but that’s not always the case. While you might spend less on commuting or work clothes, you might spend more on healthcare, travel, hobbies, and leisure activities. Don’t forget about the impact of inflation! The cost of goods and services tends to rise over time, so your retirement income needs to keep pace.
How Atlas Wealth Can Help: We’ll work with you to develop a detailed retirement budget that considers your unique needs and goals. We’ll factor in your estimated expenses, including housing, healthcare, transportation, food, entertainment, and potential lifestyle changes. We’ll also help you account for inflation and ensure your retirement income can support your desired lifestyle.
2. Not Saving Enough: It’s never too early to start saving for retirement. The sooner you begin, the more time your money has to grow through the power of compounding. Even small contributions can make a big difference over time.
How Atlas Wealth Can Help: We’ll help you determine how much you need to save based on your retirement goals, estimated expenses, and desired retirement age. We’ll develop a personalized savings plan that considers your current income, expenses, and investment options. We’ll also help you explore different retirement savings vehicles, such as 401(k)s, IRAs, and other tax-advantaged accounts.
3. Ignoring Investment Risk: Your investment strategy should evolve as you approach retirement. While growth is important in your early years, preserving your capital and generating income become more critical as you get closer to retirement.
How Atlas Wealth Can Help: We’ll create a diversified investment portfolio designed to balance growth and risk, taking into account your time horizon, risk tolerance, and retirement goals. We’ll regularly review and adjust your portfolio as needed to ensure it remains aligned with your needs.
4. Claiming Social Security Too Early: Claiming Social Security benefits before your full retirement age (currently 67 for most people) can significantly reduce your monthly payments. Waiting longer to claim can result in a larger monthly benefit, which can be crucial for maintaining your financial security in retirement.
How Atlas Wealth Can Help: We’ll help you analyze your options and determine the optimal time to claim Social Security to maximize your benefits. We’ll consider factors such as your health, life expectancy, spousal benefits, and other income sources to help you make an informed decision.
5. Not Having a Plan for Healthcare Costs: Healthcare expenses can be a significant burden in retirement. Medicare covers some costs, but it doesn’t cover everything. It’s essential to have a plan to cover potential out-of-pocket expenses, such as deductibles, copayments, and long-term care.
How Atlas Wealth Can Help: We’ll help you understand your healthcare options, including Medicare, supplemental insurance (Medigap), and long-term care insurance. We’ll develop a strategy to manage healthcare expenses and ensure you have adequate coverage in retirement.
