Three financial mistakes to avoid in retirement

Retirement is a time of life that many people look forward to, but it’s also a time when financial mistakes can have serious consequences. Here are three significant financial mistakes people make once they retire, and what you can do to avoid them.

Overspending in the early years of retirement

Retirement is often associated with the freedom to spend more time with loved ones, travel and enjoy new hobbies. But many retirees make the mistake of overspending in the early years of their retirement, which can lead to financial struggles down the road. As you head into retirement, it’s important to create a realistic budget that considers your income, expenses and savings. This will help you determine how much you can afford to spend on discretionary items like travel and hobbies without jeopardizing your long-term financial security.

Not adjusting investment strategy

Many retirees make the mistake of maintaining the same investment strategy they had during their working years, even though their needs and risk tolerance have changed. For example, if you’re in your 60s and retired, you may not want to have the same amount of your portfolio invested in stocks as you did when you were in your 30s and still working. Take the time to reassess your investment strategy considering your new financial goals and risk tolerance. Your Scarborough Regional Manager can help you make these adjustments and ensure your portfolio is aligned with your needs.

Failing to plan for healthcare costs

As we age, healthcare costs tend to increase. Unfortunately, many retirees don’t plan for these expenses and may end up depleting their retirement savings to pay for medical bills. Medicare provides some coverage for retirees, but it doesn’t cover everything, and there are gaps in coverage that can be costly. It’s important to plan for healthcare costs in your retirement budget. Consider purchasing supplemental health insurance or long-term care insurance to cover expenses that Medicare doesn’t cover. This can help protect your retirement savings and ensure that you have the financial resources you need to live comfortably in your later years.