As we age, our financial priorities and needs change. Once you reach the age of 60, it’s crucial to take a step back and evaluate your current financial situation to ensure that you’re on track for a comfortable retirement. However, even with the best intentions, it’s easy to fall into certain money traps that can derail your plans.
Here are some major money mistakes to avoid once you turn 60.
Not Registering for Medicare on Time
Even if you postpone receiving Social Security benefits, failing to enroll in Medicare when you turn 65 could cost you. To sign up for Medicare Part B, you have a seven-month window starting three months before the month you turn 65. And it’s best to start as soon as possible.
You may incur a late enrollment fee of at least 10% on your monthly premium for the rest of your life if you miss that window.
If your present employment still insures you at age 65, you can be immune from this fine. However, since your current employer must provide your health plan, COBRA and retiree health plans are unacceptable.
Overspending on Grandchildren or Adult Children
It should go without saying but spending too much money can wipe out your savings and ruin your plans for a comfortable retirement when you live on a limited income. Remember that small expenses accumulated over time frequently deplete your retirement savings.
Your loved ones can be one of the biggest dangers to your retirement money. Before retiring, make a spending plan and stick to it, despite requests from family members or your grandchildren’s birthday or Christmas wish list tempting you to go over budget.
Early Social Security Withdrawal
As early as age 62, you can begin taking Social Security payments. However, if you take money out of your account before reaching full retirement age, your lifetime benefit would be reduced by around 30%. And you can lose out on thousands of dollars per month as a result. Waiting until full retirement age, which is 66 or 67 if you were born after 1943, will allow you to fully withdraw your benefits if you’re still making enough money to get by.
Delaying receiving Social Security benefits until age 70 can be a wise move for many people. This is so that people who don’t take their Social Security benefits at full retirement age might receive “delayed retirement credits” from the government. Your benefit increases by 6 to 8 percent (8 percent if you were born after 1943) for every year you postpone receiving it until you are 70.
Not Planning for Long-Term Care Costs
Many people are unaware that Medicare does not pay for long-term care, which includes stays in nursing homes and assisted living facilities. You should plan for long-term care costs because, according to the U.S. Department of Health and Human Services, seven out of ten adults turning 65 today will require some form of long-term care.
You can incorporate this into your retirement savings strategy, but remember that long-term care is costly. A private room at a nursing home can cost more than $7,000 per month, with costs ranging from $20 per hour for a home health assistant. For many, purchasing long-term care insurance is the wisest course of action. You will pay less in premiums the earlier in life you buy this coverage.
Letting Your Partner Handle All the Money
It’s common for couples to leave their finances to one person instead of working on them together, but doing this going into your 60s is risky. One of you is likely to pass away before the other, and you don’t want to be left alone with money problems you don’t understand.
This is especially important for women. On average, women live five years more than men. However, according to a report from UBS, 56% of married women say they leave financial planning to their spouse.
Everyone should be in charge of their future, but in your 60s, you need a plan for your money to have a happy and healthy retirement.
Not Following a Budget Plan
Many people only realize how much they spend once it’s too late. They shop with credit cards without looking at their budget, get into debt, and then enroll in a debt settlement program to gain financial freedom.
Having a budget will help you keep track of your expenses and ensure you’re spending appropriately.
Aggressive Investing
Another mistake that retirees often make is that they invest too aggressively. Once you reach 60, you should be careful not to invest too aggressively in your retirement savings, and this is because you won’t have as much time to get back on your feet if the stock market drops sharply.
What is the worst money mistake people make after turning 60? Have you made any financial mistakes after retirement? How did you rectify them? Share with us.
