Mistake 15: Not Doing the Math After a Major Life Event
When most people retire, they want to focus on relaxing and stop doing math. They did so much scrimping and saving to get there, they might not realize that they need to continue to keep an eye on their finances now that they’ve actually made it across the finish line.
Big medical costs, the death of a spouse or divorce — yes, it happens after 65 — all can mean it is time to take another look.
Why This Is a Mistake
If you don’t reassess your finances every so often, especially after a life-changing event, you might end up running out of money sooner than you planned. In the case of divorce, for instance, it’s tough, especially in retirement, to maintain your lifestyle when you must fund two households instead of one. Plus, you have to consider how retirement accounts will be split.
The death of a spouse also brings about new financial circumstances. Surviving spouses will need to create a new budget to account for any lost income. Work with a financial planner to estimate how expenses and income will change in retirement.
If you receive a life insurance payout or other benefits, work with your advisor to find the best way to put that money to use, whether it be toward paying off debt, putting it into savings or investing it.
