1. Claiming Social Security too early
Social Security retirement benefits include receiving a monthly check once you’re at least 62 years old. The amount you’re entitled to receive each month depends on multiple factors, including the age you start receiving Social Security benefits. But if you start when you’re 62, you could be leaving money on the table.
2. Failing to enroll in Medicare
Medicare is the federal government’s health insurance program. It’s specifically designed for people who are 65 years or older, though other groups could potentially receive benefits. Getting your Medicare insurance squared away is an important part of retirement planning. You’re likely to stop working when you retire, which will end your job-sponsored health insurance.
3. Not planning for additional health care costs
Health care costs are high in and around retirement age, which means you need to be financially prepared to cover these expenses. Qualifying for health insurance through Medicare is helpful, but it could still be important to have additional funds set aside for what your plan won’t cover.
4. Failing to budget
If you don’t have a sound budget in place years before starting retirement, you might not have the funds you need to live how you want. This may include having extra money to travel, visit family, and own a second home. You might think you have enough money to do all these things, but budgeting can help you make sure your finances are sound.
Estimating your retirement costs goes hand-in-hand with creating a budget for retirement. Starting with a budget can help you know how much money you need to include in your estimates.