9 Worst Financial Mistakes Seniors Can Make This Year
From: pftoday.org
Many current or soon-to-be seniors on a fixed income have to be very cautious with their money, or potentially face a situation of outliving retirement savings and finding themselves in a deep pickle.
One such way to avoid running into trouble is to regularly do a personal audit to identify any unnecessary expenses or over-spending that may have crept up over time. After all, lots of little expenses quickly add up to big chunks of money. And overspending in retirement (even if by accident) can drain the bank account fast… leading to a potential stressful situation with no way out during your retirement years.
That’s why we put the list below together, which can help identify and plug a leaky bank account…
#1 – Failing to Move to More Conservative Investments
Once in retirement, it’s much harder to recover from large negative swings in savings. Financial advisors often recommend a long term strategy and many times suggest leaving money in the market regardless of the ups and downs. But that’s because over time the market, while very volatile at times, has historically ended up increasing in value over the long term.
In retirement, however, investors have to think more short term. They may not have the ability to wait 5-10 years for the market to recover… especially when on a fixed income and access to cash is needed regularly.
Depending on your time-horizon and personal situation, it may be prudent to keep keep some money in more aggressive growth investments, but in most cases it is wise to focus more on protecting capital rather than growing it in retirement.
#2 – Born Before 1963? Take $3,120/year Off Your Mortgage with the New Government HARP Replacement Program
If you’re a homeowner, this one thing could save yourself thousands of dollars this year…
Congress recently replaced HARP with a new government program called the Freddie Mac Enhanced Relief Refinance (FMERR) initiative. This program is designed to help the average American homeowners reduce mortgage payments by an average of $3,120/year (or $260/month).
There’s no telling when the program could expire, so it’s suggested that homeowners visit the free Homeowner Savings website to check if they qualify right away.
If you owe less than $625,000 on your home you may qualify for the FMERR option. It’s hard to believe this program exists but after HARP helped more than 3.3 million U.S. households reduce their mortgage, the government knew they had to step in with a replacement.
So if reducing your payments by $260/month, paying off your mortgage faster, or even taking some cash out would help you, it’s important to check your eligibility here. Checking your eligibility is quick and completely free!
