Retirement Mistakes Turn Savings Into Debt

People have different hopes and dreams about the future, but everyone wants the opportunity to enjoy a comfortable retirement. In order to achieve this goal people have worked for decades to ensure that enough funds are available when they decide to call it a career. They shrewdly manage their money to make sure that their objectives are met. However, when an individual turns 59 ½ (or whatever age he has chosen) his role as a careful money manager does not end. In fact, it is more critical than ever that sound financial decisions are made. Otherwise, a few bad decisions can turn what's taken years to accumulate into debt in an instant. Here are some common financial mistakes to avoid in retirement.

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• Overanalyzing your investments. Additional free time may result in additional scrutiny to where your money is and how it' s performing. Too much analysis may lead to decisions based on emotion. Emotional decisions lead to more debts than gains.
• Being overaggressive. Aggressive investments are much more risky. At this stage of an individual's life he may be less able to absorb a big loss.
• Being under aggressive. An individual's funds will need to last for his total life expectancy. Being too conservative could cause shortfalls down the road.
• Activating Social Security payments prematurely. Starting to receive Social Security checks before your designated age (it varies depending on year of birth) will reduce the amount of the payments.
• Avoiding professional help. Many seniors are less likely to seek help with their finances.
• Spending too much money. Your savings will need to last for your lifetime and life expectancies are continuing to grow.
• Neglecting to anticipate inflation. The cost of living will continue to increase during your retirement years and your financial plan should address this.
• Having an under diversified portfolio. Diversification is sound investment advice for people in all stages of life. It is a sound strategy to decrease your investment risks.

Years of hard work should never be neutralized in an instant. Don't let your retirement savings turn into debts as the result of a few bad decisions. Be aware of the needs and circumstances that surround money management during retirement. Careful planning before and during retirement can help you live the comfortable life that you always dreamed of.

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.