Saving for retirement is difficult enough if all goes according to plan. However, individuals often encounter serious speed bumps on the road to retirement wealth. While one of these issues on its own might not spell disaster, taken together, these obstacles can derail even the soundest retirement plans.
Here are the 30 greatest threats to your retirement, as well as tips for overcoming them.
2. Keeping Too Much House
An oversized house can be a serious financial burden for individuals trying to save for retirement. According to McClain, a house that’s too large for your needs can become a liability, between upkeep costs and property taxes. While it’s natural to feel sentimental toward a home — or to want to avoid the stress of moving — people trying to save for retirement should consider relocating to a more appropriately sized property.
3. Having a Mortgage in Retirement
Depending on a retiree’s situation, having a mortgage in retirement could be a boon or a bust. If your mortgage payments are low, keeping that large property might not be a problem. On the other hand, if high house payments are preventing you from adding to your retirement nest egg, you might want to consider selling that overpriced property and moving to one that’s more affordable.
4. Giving Too Much Away, Too Early
If you have extra cash, you might be tempted to give some away to family members or a favorite charity. While there are some serious tax benefits to donating your retirement assets to charity, individuals need to be mindful of timing. According to McClain, those who give their money away too early risk outliving it.
5. Medical Expenses
Saving enough for retirement is difficult in and of itself but, when you add in the burden of paying for health care during your golden years, the goal can seem insurmountable. According to a recent Fidelity survey, couples in their mid-60s can expect to spend $245,000 on medical expenses during retirement.
“Large, debilitating medical expenses can decimate your savings,” said personal finance writer Elizabeth Colegrove. She advises soon-to-be retirees who are still working to contribute money to a health savings account (HSA) whenever possible. A great vehicle to supplement your other retirement income, an HSA lets individuals pay for qualified medical expenses tax free.
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