9 dumbest retirement moves
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"Make sure you've got an adequate reserve for large
out-of-pocket expenses," says Suzman.
Do it right: Don't take
anything for granted. Make sure you set aside your own funds for
retirement. Always have a plan B.
Let the kids' needs trump yours
You started saving money for Junior's education the minute he showed
his face, but in the process you neglected to put anything aside
for retirement. The result -- Junior has a nice fat college fund
and you'll be working until you're dead. Unless you relish raiding
your change jar to pay your electric bill, bump Junior's college
fund down a notch on your list.
Paul Hodge, director of Harvard Generation's Policy
Program and chair of the Global Generations Policy Institute, says
there's nothing wrong with a kid waiting tables to help pay for
college. It might even be character-building for you and your
offspring. "If you set money aside for retirement then you won't
be a burden on your children later on," Hodge says.
Do it right: Pay yourself
first. The 529 plan takes a back seat to the 401(k) plan.
Count on your partner's income to always be there
Many seniors have a tough time making it on two incomes, much less
one. Here are some of the facts about surviving on inadequate retirement
according to Ramsey: "USA Today reports that out of 100 people age
65, 97 of them can't write a check for $600, 54 are still working
and only three are financially secure. Bankruptcies among those
65 and older have gone up 164 percent in the last eight years."
Whew! That's scary stuff and a long way from that golf-playing,
globe-trotting, low-stress retirement you envisioned.
If those numbers make you nervous, consider that thousands
will face even more reduced circumstances because they've failed
to consider that a big chunk of their income might end up missing
in retirement. Death and divorce happen -- and they change everything.
Hodge says women are particularly vulnerable to impoverishment
after hitting retirement age. "Their biggest mistake is that they
assume someone else will take care of them," he says.
Plus they often have their career years cut short
with caregiver duties, for kids and parents.
Do it right: Women in
particular should consider how dependent they are on their marriage
when making retirement plans. Don't assume anything, and take a
hard look at survivorship aspects of pension plans.
Plan to work forever
The only senior with a guaranteed gig is Santa Claus, and that job's taken. Face it, age discrimination may be illegal, but it's alive and well and bound to impact your job plans for the future. In addition, many professions such as law enforcement, the military and aviation have mandatory retirement ages. And that's not all.
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