Beck, Lenox & Stolzer Estate Planning and Elder Law offers this important information on “Over 50? Here Are Money Mistakes to Avoid”. After you’ve worked for a few decades and accumulated assets and investments, there are certain mistakes you’ll want to avoid, says a recent article, “7 Money Mistakes People 50 and Older Make” from yahoo! finance. One of the most common is failing to plan for the cost of long-term care. The article suggests looking into LTC insurance when you’re relatively young and healthy.
Another mistake is to match increases in earnings with increases in spending. Known as “lifestyle creep,” this is a natural tendency to want to enjoy a bigger house, fancier car and more extravagant vacations as income grows. However, the downside is that you’re spending more and saving less, which will return to haunt you during retirement.
Tied to lifestyle creep is underestimating how much money you’ll need to have to enjoy a real retirement—when you’re not working part-time at a second career because you didn’t save enough when you could have. Maximize your contributions to 401(k)s and IRAs instead of spending more on a more expensive car. Your future you will thank you.
Savings for retirement need to grow over the decades. Keeping money in a savings account or relying on low-risk investments can protect your money. However, it will come at a cost. A moderate portfolio with some investment risk is better over the long term than no risk.
Neglecting to do estate planning, particularly failing to update estate plans made years ago, creates many problems for families. Any major change in your life, including marriage, divorce, death of a spouse, birth of a child or grandchild, or relocation, should be accompanied by a review of your estate plan. This ensures that your wishes are reflected, avoids possible legal battles among family members and establishes a legacy of caring. An estate planning attorney can help you navigate this.
Ignoring the cost of inflation can shrink your purchasing power, so any retirement projections should include the impact of inflation.
Longevity is the big mystery in all retirement planning. We cannot know how long we’ll live, so we tend to underestimate our lifespan. Plan for a longer retirement by creating a plan for sustainable withdrawals from retirement accounts.
It is easy to understand why some of these mistakes are made. Many of us admit to wanting to keep our heads in the sand. But, if you are over 50, we hope you will take to heart the money mistakes to avoid. Where Beck, Lenox & Stolzer is concerned, we can help with your estate planning and with figuring out how to address your long-term care concerns. Click here to schedule a free phone consultation with one of our attorneys.
Reference: yahoo! finance (June 13, 2024) “7 Money Mistakes People 50 and Older Make”
