You’ve just retired. All of your years of saving and budgeting has prepared you for this day, right? WRONG. Post-retirement budgeting is whole different ball game. With less income coming in and often more money coming out, many seniors make the mistake of leaving their financial strategy unchanged. We’ve compiled some of the most common financial mistakes that seniors make and how to fix them!

1. Not Including Long-Term Care Planning

Nobody wants to allocate money to something as bleak as long-term care planning. While it may seem like you’re invincible or “too healthy” to need long-term care, it is much more common than you may think. According to the Centers for Medicare & Medicaid Services in 2015, at least 70% of people over 65 will need long-term care services and support at some point in their lives. Due to the fact that Medicare does not include long term care benefits, it may be wise to invest in this possibility yourself. If allocating a portion of your savings seems too difficult, try looking into a long-term care insurance policy!

2. Not Researching Senior Living Care Before Signing a Contract

One of the most common financial blunders for seniors is to jump into the first senior living community or nursing home without researching which kind of care you actually need or can afford. Overpaying for unneeded services can have a negative impact on your retirement savings, making it that much more important to figure out what YOU really need.

Another serious mistake retirees make is jumping into the first community they see, without comparing prices. A good way to tackle this problem is to figure out what you can afford and which amenities you need first and go from there. With the need for retirement communities at an all-time high, you have more options than ever to find the place that meets your needs.

3. Not Understanding Which Resources are Available

Too often, seniors are unsure of what kind of benefits are available to them, causing them to not apply for benefits at all. Benefits like VA insurance, Tricare for life or Medicaid income often get overlooked, leaving money on the table that could be used for other aspects of their life. If you are unsure about whether or not you qualify for extra benefits, TALK TO A PROFESSIONAL!

4. Overspending in Early Retirement

Make sure to enjoy retirement, but with a financial plan. It may be tempting to take that year-long European vacation or buy that new car you’ve been dreaming of right when you retire, but make sure you sit down and plan those large expenses to ensure you don’t run out of savings down the road!

5. Not Having an Investment Plan

You’ve worked your whole life in your specific industry, becoming a master of your craft. But, unless you were a financial planner, you may not be equipped to plan your retirement investments on your own. Don’t be afraid to hire a professional! Financial planners will help with creating a tax-efficient retirement distribution strategy in order to make sure that you get as much as you can from your retirement savings.

An effective retirement investment tip to use is to stick to the “Rule of 100”. This rule states that your age, plus the percentage of high-risk investments (i.e. stock market) you have should equal 100. So, if a senior is planning to retire at 65, the Rule of 100 states that they should only have 35% of their retirement portfolio invested in these high-risk investments, with the other 65% invested in safe assets like high-grade bonds or government debt. On the flip side, when preparing for retirement, don’t be too afraid to take some chances. Being too conservative can leave you with too little in retirement years!

6. Trusting Their Employer Fully for Retirement Planning

While 401K’s are a great opportunity to save money for retirement, your the amount they can make is limited. They should act as a foundation for your financial plan, not the entirety of it. Relying solely on employer-based retirement benefits often leaves retirees with too little during their post-career lives. IRA’s and Health Savings Accounts are both great ways to supplement your 401k while enjoying tax benefits in the process!

7. Taking Social Security Too Early

According to Social Security, the earliest a person can start receiving Social Security benefits is at age 62. While this may seem like an easy way to supplement your income, you may be kicking yourself in the foot years down the line when your benefits are much lower than they could have been. For seniors born between 1943 and 1954, the full retirement age is 66. A common misconception is that you are always best to begin drawing social security benefits at age 65, when in fact you will only be receiving 93.3% of your full monthly benefits. Talk to your local Social Security office and your financial advisor to determine which age is right for you to start drawing benefits.

At The Wellington Senior Living, we can help with saving money during retirement with our affordable apartment pricing! With our WellFlex pricing, you can pick the amenities that you need, without overpaying for the ones you don’t. If you or a loved one are looking for a price-friendly senior living community, give us a call!