Money management is something few people actually want to think about, however it’s often a necessity. Unfortunately, it’s not without pitfalls either. Accidents happen, unforeseen circumstances arise, and we aren’t always prepared for them. However, there are some common mistakes you’ll certainly want to try to avoid.
1. Not Saving Enough
Retirement can be rough if you haven’t accounted for things like inflation. Investing too conservatively or not investing enough might lead to shortcomings when it comes to long-term income. Make sure you’re making wise investments, diversifying them, and that you’re also giving yourself some financial padding.
2. Having Gaps in Insurance Coverage
Medicare doesn’t cover everything and there are often gaps in coverage. When it comes to long-term care, it won’t cover nursing homes or the costs of assisted living. Make sure you fully understand what’s covered by your plan and obtain added coverage if necessary.
3. Not Planning for Incapacity
While it’s not something anyone wants to plan for, as we get older it becomes a necessity. Unfortunately, you’ll need to make sure you’re prepared for illness, serious injury, and even your eventual passing. In addition to a will, you should also document how you want your healthcare handled. You may want to designate someone as a healthcare proxy to handle important medical decisions. You should also likely have someone with power of attorney to handle financial affairs.
4. Succumbing to Scams
Fraud and identity theft are pretty rampant problems these days, and many scammers tend to prey on older individuals. Be careful with your personal information and look for red flags when conducting transactions.
5. Underestimating for Retirement
Often the biggest expenses are those which are unplanned. Underestimating the costs of illness or potential accidents, and not having an emergency fund, can leave you in tight spot.
6. Not Doing Due Diligence
Before making investments, always be sure to do your homework first. Research any financial providers you may be considering and verify your planner or accountant’s credentials before hiring.