What Retirees get wrong

Here are some common missteps people make after retiring:

• Not understanding their budget in retirement. People might make assumptions about costs that will go down while failing to recognize other costs that might go up. Work with a professional to crunch the numbers for your spending strategy.
• Not modifying your income strategy. You could withstand losses a little easier during your working years when you had a paycheck and you were constantly contributing to your retirement accounts. Get an analysis of how much of your money is exposed.
• Not applying for Social Security at the right time. It doesn’t always make the most sense to start taking Social Security as soon as you’re eligible at age 62. Benefits continue to grow to your full retirement age and beyond to age 70 when the benefits are maxed out. Get an analysis on the timing of your Social Security.
• Spending too much money too soon. Without a spending strategy, this is when you run the risk of “coming back down the mountain” too quickly. Analyze your spending habits and get a professional assessment. 
• Not being aware of frauds and scams. This poses more of a threat that some people might realize, and it only takes a moment of weakness or distraction for fraudsters to make their move. Do your research first and get a second opinion if something sounds too good to be true.
  
• Cashing out your pension too soon. It might be tempting, but it’s not always the best move to make. Weigh your options and get guidance on what to consider about the lump sum if you do cash out on your pension. Overpaying taxes is a misstep that no one wants to make. Finding a tax-efficient way to withdraw money from your retirement accounts can help preserve your savings. Get an analysis of your income and tax situation.
  
• Supporting adult children or other family members can have a negative impact on your finances. Be aware of the long-term consequences on your own financial situation if they aren’t able to pay you back down the road. Remember that the best gift you can give your children is not having to rely on them some day because you ran out of retirement funds. 
• Being house rich but cash poor is another potential misstep. There could be benefits of downsizing once the kids have grown and moved out. Be sure you model this potential for your retirement plan. 
  
• Not staying socially and physically active. This could lead to isolation and a decline in your physical and mental health. Be sure to visualize the kind of retirement you want and then plan for it proactively.