Different stages of life bring different challenges, and people nearing retirement often make some of the same mistakes with their money time and time again. As a pre-retiree, it’s important to understand that your financial plan needs to be tailored around the goals you have for retirement. Let’s take a look at some of the classic mistakes we see people make.

The first problem we encounter is when someone hasn’t changed their investment strategy to match their needs near retirement. They continue to invest their money at age 59 like they were at age 39. This can be a mistake because, as you age and become closer to retirement, your investment strategy should change with it. This usually means taking less risk and having more conservative investments that won’t fluctuate too much when the markets go up or down.

Another issue we see quite often is pre-retirees failing to plan for Social Security. Social Security income is a key component of most retirement plans, and it’s important to understand when you can start collecting payments and how to get the most out of your benefits. If you don’t have a plan or strategy for claiming, you could make some big mistakes with this money.

A third mistake that you need to be aware of and avoid deals with healthcare needs. Most people assume that the majority of their expenses will be covered by Medicare.  But this isn’t always the case. Many pre-retirees fail to plan for out-of-pocket costs such as deductibles, copays, and other expenses that can add up quickly. Make sure you understand your healthcare needs before retirement so that you can be prepared for any potential costs.

The last mistake we see sometimes is inadequate tax planning. Taxes can take a sizable bite out of your retirement income, so it’s important to plan ahead and understand the best strategies for keeping them as low as possible. Don’t wait until you need to file taxes to start thinking about it; make sure you’ve done enough research beforehand and have a plan for how you will distribute your money in the most efficient way. 

At Johnson Brunetti,  we understand the importance of having a solid financial plan in place before you retire. We strive to create comprehensive plans that will help our clients achieve their goals for retirement and beyond. The best place to get started is through our complimentary Money Map review, which you can book today.

Here are some of the things we discuss in this episode:

1:05 – How is our financial life like a closet?

2:56 – What are the first steps you can take to start getting organized?

5:56 – Money Map retirement review details

7:34 – On the Case with Heath: When refinancing doesn’t make sense

12:49 – Still investing like you were 20 years ago

14:20 – Starting Social Security without a strategy

16:45 – Mythbusting with Matt: Financial planning is much easier today  

20:48 – Mailbag question on managing an old 401(k)