When it comes to retirement, you’ve probably heard all the “must-dos”: start saving early, invest wisely, and don’t touch your 401(k). But what about the “don’ts”? Avoiding common mistakes can be just as important as following the right steps.
At Vernon Management Group, we’ve helped countless individuals and families navigate their journey to retirement. We’ve seen firsthand how a few small oversights can create big headaches down the road. That’s why we’ve put together a list of common retirement mistakes and how you can avoid them.
Mistake #1: Underestimating Healthcare Costs Many people assume Medicare will cover all their healthcare expenses in retirement, but that’s a costly misconception. The truth is, out-of-pocket costs—including premiums, deductibles, and co-pays—can add up quickly, often becoming one of the largest expenses in retirement.
How to Avoid It: Don’t ignore healthcare. Research Medicare options, consider a long-term care insurance policy, and, most importantly, factor these expenses into your retirement budget. A financial advisor can help you estimate these costs and ensure you have a plan to cover them.
Mistake #2: Not Having a Post-Retirement Budget You’ve spent years saving, but do you know how you’ll spend in retirement? Without a clear budget, it’s easy to overspend early on, leaving you with less to live on later.
How to Avoid It: Before you retire, create a realistic budget based on your anticipated post-work lifestyle. This isn’t just about cutting costs; it’s about understanding what you want your retired life to look like and making sure your money supports that vision.
Mistake #3: Ignoring the Impact of Inflation $1 million today won’t have the same purchasing power 20 or 30 years from now. Inflation slowly erodes your savings, which is why it’s a mistake to become too conservative with your investments too early in retirement.
How to Avoid It: Keep a portion of your portfolio invested in assets that can outpace inflation, like stocks. While your risk tolerance will likely decrease, a balanced approach can help your money continue to grow and provide a hedge against rising costs.
Mistake #4: Forgetting to Update Your Estate Plan Your will, beneficiaries, and power of attorney documents aren’t “set it and forget it” items. Life changes—marriages, divorces, births, and deaths—all require a review of your estate plan.
How to Avoid It: Make it a habit to review your estate plan every few years or after any significant life event. Ensuring your documents are up-to-date gives you peace of mind and protects your loved ones.
Mistake #5: Going It Alone Retirement planning is complex, with countless variables and potential pitfalls. Trying to handle everything yourself can be overwhelming and lead to costly errors.
How to Avoid It: Partner with a professional. A qualified financial advisor can provide an objective perspective, help you identify and correct mistakes before they happen, and create a comprehensive, personalized plan that aligns with your goals.
Ready to build a retirement plan that avoids the most common mistakes? Contact us at Vernon Management Group today for a complimentary consultation. Let’s work together to make your retirement dreams a secure reality.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial, legal, or tax advice. The information provided is general in nature and is not intended to be a substitute for professional advice tailored to your specific financial situation. All investing involves risk, including the potential for loss of principal. Past performance is not indicative of future results. Vernon Management Group, a registered investment advisor, provides this information with the understanding that you will consult with a qualified professional before making any financial decisions. We are not responsible for any actions taken based on the information contained in these blog posts. Contact us today for a personalized consultation to discuss your specific financial needs.