When it comes to retirement, thoughts of getting away to a secluded beach or finally getting to that special hobby you’ve been putting off comes to mind. But most don't think about the financial planning that makes retiring comfortably possible.
So, whether you're just beginning your career or coming close to your retirement, it's important to start building a solid retirement plan, and this includes knowing what not to do. Here are five retirement planning mistakes to avoid.
1. Failing to Plan or Getting to it Later
It’s never too early to start planning. But with so many things that need your attention now, planning for retirement gets pushed down on your list of priorities. Make the time for your financial planning by treating it like an appointment. Schedule some time, at least an hour daily initially, dedicated to retirement planning. And as a psychologist, there are key questions to consider, including how to wind down your practices, transfer patients, ensure proper legal notices and more. Here are some informative webinars to help you get started on your retirement plan: Ethics and Risk Management in Retirement of Your Psychological Practice (2 CEs) and Working with Couples and Families, Risk Management with the Suicidal Patient, and Legal and Ethical Issues Presented by Retirement (6 CEs).
However, with so many complex retirement strategies to consider, you may need professional assistance in building a plan. Make sure to connect with retirement experts, like Trust-endorsed UBS Financial Services. Their experienced retirement advisors will provide retirement investment advice and planning. They'll help you focus on critical elements, which include, but are not limited to, 401(k) Plan, Simplified Employee Pension Plan (SEP-IRA), Savings Incentive Match Plan for Employees (SIMPLE IRA), and Profit Sharing/Defined Benefit Plan.
2. Accruing Credit Card Debt
Minimizing and ultimately eliminating credit card debt is a good strategy to have in any financial planning. Take the time to jot down your spending habits and figure out which credit card has the highest interest rate. That way you can keep making at least the minimum payment on all of your cards, but make extra payments toward the credit cards with the highest rate. Once one is paid off, repeat the process with your next highest interest card.
3. Forgetting About Inflation & Underestimating Living Expenses
With all the buzz surrounding inflation recently, it's important to keep that in mind during your financial planning. An increase in the cost of food, goods and services will diminish your purchasing power during retirement. Make sure to plan for costs in the coming years, including the money you'll need to spend on maintaining your home and on leisure activities like eating out or traveling.
4. Not Taking Care of Your Physical and Mental Well-Being
Your physical and mental health is very important. Keep your health on track by regularly checking with your doctor(s) and staying on top of your routine wellness checks. Also, stay active with regular exercise, and maintain a well-balanced diet. The small steps you take every day towards a healthy lifestyle can make a big difference in helping you live longer and help reduce your risk of major health issues and the associated costs.
5. Not Prioritizing Your Insurance Coverage
Life is unpredictable; that’s why it's important to have the coverage you need to protect yourself, your family and career. As a psychologist, especially if you're in independent practice, you may need to devise your own retirement plan and possibly one for your partners or employees. The Trust offers a variety of insurance and financial security products designed to do precisely that—protect you and your career. Click here to view each program and learn how it can be tailored to meet your needs now and for many years to come.
It is never too late to start planning for your retirement. The Trust knows how important financial planning and saving during your working years can be to a comfortable and secure retirement. If you find the task of mapping out your financial life overwhelming, you can always contact our partner, UBS Financial Services, at (888) 751-0287, to help guide you.