Common Mistakes When Planning for Retirement

Planning for retirement is often a complicated process. A recent article discusses several retirement planning mistakes that individuals and couples should attempt to avoid at all costs.

retirement (Photo credit: 401(K) 2013)

First, many people wrongly assume that they will spend less in retirement than they do during their working years. According to financial planner Joe Heider, however, “Most people, in my opinion, initially after they retire, actually spend more money than when they were working. When you have a job, you are in your office and you are not spending money. But now you have 24/7 to shop, travel and do all the things people couldn’t do before.”

It is also important to determine whether you have designated your spouse as your power of attorney, and if all of your accounts are jointly held or payable on death. Without power of attorney, a spouse may not be able to access the accounts of an incapacitated spouse. This is especially problematic when the spouse who cannot access the money is a stay-at-home parent with no income of his or her own.

People also falsely assume that they can keep working into old age if they discover that they failed to save enough for their retirement. However, many people become mentally ill or are otherwise physically able to work into their 70s.

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