3 Red Flags That Could Affect You Living Comfortably During Retirement
Retirement… your plan may be well-thought out, but there could always be an unforeseen event that could derail your journey. You could live a lot longer than you anticipate, have more financial health problems or suffer from a rise in inflation. But, there are certain measures you can take to ensure your money outlasts you.
Know when to Downsize
Retirees who did not save enough and want to live in their home may need to consider their reality. If it costs more to stay in your home than you can afford, you may need to be honest with yourself and make the hard decision to downsize. Your home is an asset, but if it’s too much, it could become a liability and ultimately a financial burden. An overly large home isn’t a necessity in retirement, but money is.
Helping Your Children Way Too Often
All parents want to help their children, but many of them give them way too much money too quickly. This can hurt their only financial affairs. It’s a good idea to set up an estate that you can dip into when needed, but should you not, your children can benefit later on.
Overspending
If you spend an excessive amount of money in the early part of your retirement, you won’t have enough to live on as you age. Be cautious of focusing all of your money into saving vehicles like GICs and cash. Whilst it may seem like the safest option, you may be missing out on opportunities and even lose money after you pay taxes and factor in inflation. This, along with overspending, means you’ll need to make some major lifestyle choices if you don’t want to suffer financial ruin.
Retirement is an uncertainty in life, but what you do to prepare for it can make or break you in the grand scheme of things. Don’t make the mistakes that will affect how good you could live during retirement.
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About The Author: Matthew J. McGrath, CFA has been managing investment portfolios for well over 20 years, two of which were spent working directly on Wall Street. His Wall Street experience followed a 10 plus year career at the RBC Financial Group, where as a Vice President and CFA Charter holder, Matthew had managed over $150 Million in assets. Matthew then joined and went on to successfully grow Optimize Wealth Management. During his twenty plus years in the financial industry, Matthew has been recognized for his drive and his vision, has spoken at numerous investment conferences, and now advises individuals and families seeking a long term relationship with their financial advisor. In addition to his passion for the financial industry, Matthew is an avid runner and has run three Boston Marathons.