Financial Mistakes to Avoid Over Age 65

Here, we have compiled a list of financial mistakes to avoid over age 65.

Discussing finances is historically taboo, however, it is an important part of getting older and approaching retirement. It is often hard to decide what to spend, what to save, and what to discuss with your partner or family about your financial future. As someone reaches retirement age and starts taking out fixed income and Medicare benefits, smart spending is more important than ever. Here, we have compiled a list of financial mistakes to avoid over age 65.

1.Withdrawing Social Security Benefits Too Early

You can withdraw monthly Social Security checks beginning when you turn 62, however, these checks will likely be much smaller than if you wait until you reach “full” retirement age, between 66 and 67. By waiting to pull Social Security checks, you increase your monthly income, which may allow you to set more money aside for unexpected expenses.

2.Overspending on Yourself or Others

Arguably the most common monetary issue seen in retirement is overspending. You’ve worked your whole life and now it is time to relax and spend time with family, but on a fixed income, lavish vacations and extravagant presents still need to be budgeted for. Almost half of all retirees spend more in their first two years as retirees than they spent while working, even though retirement income is typically less than that of pre-retirement.

Many financial experts suggest saving enough to apply the 4 percent retirement rule, where a retiree spends approximately 4 percent of their savings each year, plus their Social Security benefits. By following a similar rule or budget into retirement, you can avoid overspending and running out of savings.

3.Having One Partner Handle all the Finances

An unfortunate fact is that one spouse or partner in a relationship almost always outlives the other. The number of partnerships working on financial decisions together has increased in the last few decades, however, approximately half of American adults still let their spouse or partner deal with all the monetary information. If the partner who handles the money passes away, not only is the surviving partner left to learn to manage finances, but they must also learn about their own financial situation from scratch. Work together with your partner to learn where your money goes each month and learn to take care of the financial side of your life in case of an emergency.

4.Missing your Medicare Initial Enrollment Period

Medicare’s Initial Enrollment Period spans the three months before and three months after your 65th birthday. Failing to apply for Original Medicare or a Medicare Advantage plan within this window, or failing to apply for a Medicare supplement plan within the six months after you turn 65 and enroll in Part B,  could cost you an added fee on your monthly premium for the rest of your life.

5.Forgetting to Budget for Medicare Expenses

Contrary to popular belief, Medicare is not free. Original Medicare automatically takes out your premium from Social Security, while Medicare Advantage and Medicare supplement plans both require beneficiaries to pay separate premiums. Some plans do not cover medical deductibles or copays, so it is vital that you plan for these expenses to avoid overspending.

Got Medicare Questions?

We hope this information on financial mistakes to avoid over age 65 is helpful to you.

If you have questions about your Medicare coverage, call Empower Brokerage today. Let us help with your Medicare questions so you can get back to the activities you enjoy the most. (888) 446-9157 or click here to get an INSTANT QUOTE

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About Macee Hall

Originally from the snow-capped Rockies, Macee moved to Texas in 2016 to pursue an undergraduate degree in Strategic Communication. She currently serves as a writer and editor for Empower Brokerage, as well as the marketing manager for Preferred Senior Advisors. Macee is also working on her Master’s degree in management, and hopes to inspire others with her passion for telling stories through varied digital and print marketing efforts.

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