Broker Check

5 Retirement Pitfalls to Avoid

August 10, 2022
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You’ve worked hard, and it’s time to plan for retirement. You just don’t want to continue doing the things you love. You want to do more. IM Wealth Partners has been helping clients maximize their wealth by avoiding the following common retirement pitfalls: 

1. Underestimating your monthly expenses

Your needs will change, and so will your monthly expenses.

At IM Wealth Partners, we don’t want you to be held back by the rising cost of living. A holistic income plan is crucial! First, assess your financial situation. Your financial situation is more than what you have in the bank —  it’s about how your expenses will change in the years ahead.

As you grow older, your healthcare needs may change, which comes with a price tag. Whether it’s an adventure, relaxation, or both, all of those items on your bucket list are significant to you. So let’s make sure your finances support your desired lifestyle. Also, start a rough estimate of the size of the inheritance you would like to leave behind. 

2. Forgetting about inflation

The cost of oil and groceries is rapidly increasing. We hope it’ll slow down, but we must be prepared for anything. 

Your income net worth may have had you covered up until now. However, supply-chain issues, economic stimulus programs, and natural disasters make it hard to predict your financial future. So when making your income plan, factor inflation into the mix and you can’t go wrong! 

3. Assuming your taxes will go down 

Unfortunately, the opposite may be true. 

Although filing your taxes will look a lot different, there still will be taxes to pay — and they may even increase. Do not let this scare you! You’ll need to work this into your plan. The best way to avoid this pitfall is to ensure your savings are in the right place

If your retirement savings are in a tax-deferred account, you will be taxed at your regular income-tax rate on every withdrawal. However, there are options to avoid paying taxes on every withdrawal, such as a Roth 401k or Roth IRA.

We’ll help you find a way to keep your money in your pocket! 

4. Ignoring your assets

Did you know that there are three types of assets? That’s right, and different types of assets generate income differently. Understanding the three types of assets will help you put them to work and keep them working for you in retirement. 

  1. Income assets: You can continue to make money without even working. Residential and commercial properties will secure income through rent. 
  2. Investing assets: Bonds, stocks, and mutual funds will gain interest. Equities with a high rate of return could go a long way in retirement.
  3. Saleable investments: Any collectibles, home, or business can be sold. Of course, you won’t necessarily want to sell your house, but think of what other saleable assets you have that aren’t serving you the way they used to. Offloading those collectibles could provide the necessary funds to knock items off your retirement bucket list! 

5. Incomplete retirement planning

This is where we come in! 

Our team at IM Wealth Partners will evaluate your financial situation and find ways to protect your wealth. So take the stress out of planning for your retirementContact us to set up an appointment today!